IRS Tax Debt Guide

Tax Relief Companies: How to Check One Before You Pay

By Ray Neu, Publisher | Last reviewed: October 25, 2026 | Reading time: 9 min

Short answer

Tax relief companies are private businesses that offer to deal with the IRS for a fee. The FTC warns against paying the whole fee upfront and against promises that a taxpayer “qualifies,” and the IRS lists “OIC mills” in its 2026 Dirty Dozen. Payment plans and the OIC Pre-Qualifier are available directly from the IRS.

Ads for tax debt relief often promise to settle an IRS balance for less. Whether a company can help depends partly on who does the work: the IRS lets attorneys, CPAs and enrolled agents represent taxpayers in collection matters. This guide covers what the FTC and IRS say, how to check credentials, free help and where to complain.

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What the FTC says about tax relief companies

The FTC’s consumer guidance, “Trouble Paying Your Taxes?” (April 2023), describes the pitch this way: “Tax relief companies say they can lower or get rid of your tax debts and stop back-tax collection. They say they’ll apply for IRS hardship programs on your behalf for an upfront fee. But in many cases, they leave you even further in debt.”

It adds that the upfront fee “can be thousands of dollars” and that “Some don’t even send your paperwork to the IRS to apply for programs to help you.”

The FTC’s alternative is direct contact: it suggests trying “to work out a payment plan directly with the IRS (for your federal taxes) or your state comptroller (for your state taxes)” and asking those agencies about collection alternatives.

Warning signs the FTC and IRS name

None of these, alone, proves a company is dishonest, but each is a point the agencies single out.

The whole fee upfront. FTC: “Don’t do business with anyone that tells you to pay their whole fee upfront. If they say that, walk away.”
Being told you “qualify.” The FTC says to ignore businesses that claim a taxpayer qualifies for a relief program, because only the IRS or the state comptroller makes that decision.
Monthly “maintenance fees.” FTC: “Some companies may intentionally draw out the process for as long as possible to keep collecting fees.”
Results borrowed from other customers. FTC: “Every taxpayer’s situation is unique and no company can promise a particular result.”
“Pennies on the dollar.” An IRS tax tip (2022) says Offer in Compromise mills “make huge claims about reducing unpaid taxes for pennies on the dollar” and “sometimes don’t deliver and charge large fees.”
Unexpected calls from official-sounding agencies. A January 2026 FTC alert describes callers offering an “IRS liability reduction program” and says “those aren’t real programs.”

What FTC enforcement has alleged

In October 2025, at the FTC’s request, a federal court temporarily halted an alleged tax debt relief scheme. The FTC alleged the operators impersonated government agencies, including the IRS, and claimed they could settle back taxes for “pennies on the dollar,” “often making these claims before evaluating the taxpayer’s circumstances.” It also alleged refusals “to provide refunds to dissatisfied consumers who requested one.”

In June 2026, the FTC announced a proposed order requiring the individual operators to turn over cash and assets “used to return money to consumers” and banning them from debt relief services; the FTC said litigation with the corporate defendants was ongoing. These are allegations in one matter, not findings about the industry as a whole.

What the IRS says, and what taxpayers can do directly

The IRS 2026 Dirty Dozen list (IR-2026-30, March 5, 2026) includes, as item 12, “Aggressive or misleading Offer in Compromise marketing (‘OIC mills’).” Its wording: “The Offer in Compromise program can help certain eligible taxpayers resolve tax debt when they are unable to pay in full, but ‘OIC mills’ often overpromise results and charge high fees to taxpayers who don’t qualify. Taxpayers can check eligibility using free IRS tools to avoid high-pressure sales tactics.”

The IRS 2022 tip on the same topic says: “Taxpayers who do qualify for an OIC can get the same deal working directly with the IRS, without the extra fees.”

Payment plans online

Through the Online Payment Agreement tool, individuals “can apply for a payment plan online without needing to call, mail, or visit the IRS.” As of October 2026, a short-term plan applied for online has a $0 setup fee, and individuals may apply online for a long-term plan if they owe $50,000 or less in combined tax, penalties and interest and have filed all required returns. See our overview of IRS tax relief options.

The OIC Pre-Qualifier

The IRS directs taxpayers to the Offer in Compromise Pre-Qualifier “to check your eligibility and prepare a preliminary offer.” It also says it generally won’t accept an offer “if you can pay your tax debt in full through a payment plan and/or equity in assets.”

As of October 2026, every application requires a $205 fee and a first payment unless the taxpayer meets the low-income qualifications, and the fee is not returned if the offer is rejected. Our offer in compromise guide covers eligibility and the application.

Want a second look before you sign?

A free, confidential evaluation is a way to have an IRS balance, and any offer a company has made, looked at before signing anything.

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How to check who would handle the case

What matters to the IRS is whether the individual working the case may practice before it. Circular 230, at 31 CFR § 10.3, allows attorneys, certified public accountants and enrolled agents who are “not currently under suspension or disbarment” to practice before the IRS.

Representation rights. The IRS says enrolled agents, CPAs and attorneys “have unlimited representation rights” and may represent clients on “audits, payment/collection issues, and appeals.” Preparers with only limited rights “cannot represent clients regarding appeals or collection issues.”
Who licenses whom. Per the IRS, enrolled agents are licensed by the IRS, CPAs by state boards of accountancy, and attorneys by state courts or their designees, such as the state bar.
The IRS directory. The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications lists preparers who “currently hold professional credentials recognized by the IRS.” The IRS adds that preparers not listed “may provide quality return preparation services.”
Form 2848. The person a taxpayer authorizes on Form 2848 “must be a person eligible to practice before the IRS.” In Part II, the representative signs “under penalties of perjury” and checks a designation such as attorney, CPA or enrolled agent, with the licensing jurisdiction.

Our comparison of a tax attorney vs CPA vs enrolled agent explains how the three credentials differ.

Questions people ask before signing

These questions track the FTC and IRS sources above. They are questions, not a test that settles whether a firm is sound.

Who, by name, will handle the case, and is that person an attorney, CPA or enrolled agent? Will that person sign Part II of Form 2848?
What exactly does the fee cover, and how will it be billed? The FTC suggests asking “how the company will bill you for services.”
Is there a refund policy? The FTC suggests asking “whether they offer refunds for fees if you don’t get the promised service.”
Has the company reviewed the IRS transcripts before naming an outcome? Through Get Transcript and an Individual Online Account, taxpayers can view their own transcripts, balance and payment history.
Could the balance be paid through a payment plan? If so, the IRS says an offer generally won’t be accepted.

For a sense of how attorney fees are usually structured, see our guide to what an IRS tax attorney costs.

Free and low-cost help

Taxpayer Advocate Service

TAS describes itself as “an independent organization within the IRS” and says: “Our services are free and confidential.” Requests go in on Form 911 (current revision June 2026), which TAS describes as a request for taxpayers “unable to resolve their tax issues through normal channels and are facing undue hardship as a result of the IRS actions or inactions.” TAS can also be reached at 877-777-4778.

Low Income Taxpayer Clinics

TAS says LITCs “are independent from the IRS and the Taxpayer Advocate Service” and “can represent taxpayers in audits, appeals, and tax collection disputes before the IRS and in court.” Services are “free or a small fee.” On eligibility, TAS says: “generally a taxpayer’s income must be below a certain threshold, and the amount in dispute with the IRS is usually less than $50,000.” For 2026, the income ceilings are 250% of the federal poverty guidelines, and “Each clinic will decide if you meet the income guidelines and other criteria.”

Where to report a problem

The FTC. “If you have a problem with a tax relief company, tell the FTC at ReportFraud.ftc.gov.”
The IRS, for paid tax return preparers. Form 14157, Return Preparer Complaint, is for “a complaint with the IRS against a tax return preparer or tax preparation business.” IRS misconduct examples include falsely claiming to be an attorney, CPA or enrolled agent, and someone who “Charges for services not performed.” The IRS says it generally “can’t act on complaints about federal tax matters that are over 3 years old.”
The state. The FTC directs complaints about tax preparers to the state comptroller or treasurer. Its 2025 case was filed jointly with a state, which alleged violations of state law.

When an attorney matters

For most IRS collection work, the credential is not the deciding factor: attorneys, CPAs and enrolled agents share unlimited representation rights, and the IRS says “Most taxpayers qualify for a payment plan.”

The differences show up in two places. Under 26 U.S.C. § 7525, the confidentiality protection for communications with a federally authorized tax practitioner covers only “noncriminal” tax matters before the IRS and noncriminal proceedings in federal court. And in the U.S. Tax Court, attorneys are admitted by application, while a nonattorney must meet the requirements in the Court’s rules, including an examination.

Taxpayers with possible criminal exposure or a case headed to Tax Court often ask an attorney to review the matter. See our overview of the role of an IRS tax attorney.

Related guides

Frequently Asked Questions

Are tax relief companies legit?

The FTC and IRS do not describe every company as a scam. The IRS says companies it calls OIC mills sometimes don’t deliver and charge large fees, and the FTC warns against companies that demand the whole fee upfront, promise a taxpayer qualifies or charge ongoing maintenance fees.

Can I set up an IRS payment plan without a tax relief company?

Yes. The IRS says individuals can apply online through the Online Payment Agreement tool without needing to call, mail or visit the IRS, and they receive immediate notification of whether the plan is approved.

What is an OIC mill?

The IRS uses the term for aggressive or misleading offer in compromise marketing that often overpromises results and charges high fees to taxpayers who don’t qualify. The IRS says taxpayers can check eligibility with its free Offer in Compromise Pre-Qualifier.

How can I tell whether someone can represent me before the IRS?

Under 31 CFR § 10.3, attorneys, CPAs and enrolled agents not under suspension or disbarment may practice before the IRS. The IRS directory lists many credential holders, and a representative signs Part II of Form 2848 stating a designation and licensing jurisdiction.

Where do I report a tax relief company?

The FTC asks people to report problems with a tax relief company at ReportFraud.ftc.gov. If a paid tax return preparer misrepresented a credential or charged for services not performed, the IRS accepts complaints on Form 14157.

Talk it through before paying anyone

Start a free, confidential evaluation about an IRS balance, an offer in compromise or a payment plan.

Start Your Free Evaluation Call (202) 968-1121

About the Author

Ray Neu

Ray Neu is the publisher of IRSAttorneys.net. A former law enforcement officer with a background in criminal justice and digital publishing, he oversees editorial direction, partnership standards, and compliance review for the site. He is not an attorney and does not provide legal advice; all tax law content is sourced and reviewed against the standards documented on the Editorial Team & Standards page.

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Sources

IRS Circular 230 Disclosure: To ensure compliance with Treasury Department rules governing tax practice, any tax information contained on this website was not written and is not intended to be used, and cannot be used, for the purpose of avoiding any federal tax penalty. You should consult a licensed tax professional regarding your individual situation.

Results described on this website are not a guarantee, warranty, or prediction of the outcome of any tax matter. Every situation is different. Prior results do not guarantee a similar outcome. Article content reflects general information about federal tax procedure as of the last reviewed date and may not reflect subsequent changes in IRS policy, regulations, or case law.