Many taxpayers file their federal tax returns and then eagerly anticipate details about their refund.

The best way to check the status of a refund is through the Where’s My Refund? tool, the IRS2Go app, or by signing in to the taxpayer’s IRS Online Account.­ But many people mistakenly think there are better ways to get their refund status. Here are some of the myths about tax refunds.

Myth: Calling the IRS, a tax software provider or a tax professional will provide a more accurate refund date.

Many people think talking to the IRS, tax software provider or their tax professional is the best way to find out when they will get their refund. There is no need to call the IRS unless Where’s My Refund? says to do so.

Taxpayers that do want refund info by phone can call the automated refund hotline at 800-829-1954. This hotline has the same information as the Where’s My Refund? tool.

Myth: Ordering a tax transcript is a secret way to get a refund date

A tax transcript will not help taxpayers find out when they will get their refund. IRS tools like Where’s My Refund? will tell taxpayers if their refund is approved and sent.

Myth: Where’s My Refund? must be wrong because there’s no deposit date yet

Where’s My Refund? ‎on both IRS.gov and the IRS2Go mobile app are updated once a day, usually at night. Even though the IRS issues most refunds within 21 days, it’s possible a refund may take longer. Taxpayers should also consider the time it takes for the banks to post the refund to their account. People waiting for a refund in the mail should plan for the time it takes a check to arrive. If the IRS needs more information to process a tax return, the agency will contact the taxpayer by mail.

Myth: Where’s My Refund? must be wrong because the refund amount is less than expected

There are several factors that could cause a tax refund to be less than expected. The IRS will mail the taxpayer a letter of explanation if any adjustments are made. Some taxpayers may also receive a letter from the Department of Treasury’s Bureau of the Fiscal Service if their refund was reduced to offset certain financial obligations. Before calling, check Where’s My Refund or wait for the letter to understand why the change was made. The letter will also tell the taxpayers know how to respond, if they need to.

Myth: Getting a refund this year means there’s no need to adjust withholding for 2025

To help avoid a surprise next year, taxpayers should make changes now to prepare for next year. One way to do this is to adjust their tax withholding with their employer. The IRS Tax Withholding Estimator tool can help taxpayers determine if their employer is withholding the right amount.

Taxpayers who experience a life event like marriage, divorce, the birth or adoption of a child or no longer being able to claim a person as a dependent are encouraged to check their withholding. Taxpayers can use the results from the Tax Withholding Estimator to complete and submit a new Form W-4, Employee’s Withholding Certificate, to their employer as soon as possible. Withholding takes place throughout the year, so it’s better to take this step now.

IR-2025-30, March 10, 2025

WASHINGTON — The Internal Revenue Service encouraged taxpayers who have yet to prepare and file their tax returns to consider taking advantage of the many free options available – including Direct File, a free, fast and easy way to file directly with the IRS, now available in 25 states.

In addition to Direct File, IRS Free File also offers free tax preparation software through its partners on IRS.gov. Also, the IRS offers free, in-person, help through its Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE) programs.

Direct File

IRS Direct File, the latest filing option for taxpayers, is a web-based service that allows taxpayers to file directly with the IRS for free. It works on mobile phones, laptops, tablets or desktop computers. The system leads taxpayers step-by-step through a series of questions to prepare their federal tax return. Once taxpayers have completed their federal tax return, the Direct File system automatically guides them to complete their state tax filings if they have a state tax obligation.

Direct File began as a pilot program last year and, after receiving overwhelmingly positive reviews from taxpayers, is now available in 25 states.

Direct File features a data import tool that allows taxpayers to automatically import data from their IRS account, including personal information, the taxpayer’s Identity Protection PIN and some information from the taxpayer’s W-2. Live chat is available, and users can opt into additional authentication and verification, which allows customer service representatives to provide more information. In addition, there is a chat bot to help guide users through the eligibility checker.

Taxpayers can use Direct File if they have certain types of income, outlined in more detail in the Direct File fact sheet. Starting this month, taxpayers reporting retirement income, contributions or rollovers can also use Direct File.

Last year Direct File supported taxpayers claiming the Earned Income Tax Credit, the Child Tax Credit and the Credit for Other Dependents.

This year, Direct File will also cover taxpayers claiming the:

• Child and Dependent Care Credit
• Premium Tax Credit
• Credit for the Elderly and Disabled
• Retirement Savings Contribution Credits
• Health Savings Accounts deductions

The Treasury Department estimates that more than 30 million taxpayers are now eligible to use Direct File across the following 25 states: Alaska, Arizona, California, Connecticut, Florida, Idaho, Illinois, Kansas, Maine, Maryland, Massachusetts, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Washington state, Wisconsin and Wyoming.

IRS Free File

Most taxpayers can file electronically for free by using IRS Free File, available only on IRS.gov.

Currently in its 23rd year, IRS Free File offers free tax preparation software from eight companies in the public-private partnership with the IRS. As part of this partnership, tax preparation and filing software partners offer their online products to eligible taxpayers for free.

This year IRS Free File guided tax software products are available to taxpayers with a 2024 adjusted gross income (AGI) of $84,000 or less. IRS Free File also provides fillable forms for use by any taxpayer, regardless of income, who is comfortable preparing their own return. To access these free tools, taxpayers must start from the IRS Free File page on IRS.gov.

Other free options to file tax returns

In addition to Direct File and IRS Free File, the IRS reminds taxpayers that there are other free programs available to help:

• Volunteer Income Tax Assistance/Tax Counseling for the Elderly. Taxpayers can find organizations in their community with IRS certified volunteers that provide free tax help for eligible taxpayers including working families, the elderly, the disabled and people who speak limited English.
• MilTax. A Department of Defense program, MilTax generally offers free return preparation and electronic filing software for federal income tax returns and up to three state income tax returns for all military members, and some veterans, with no income limit.

Beware of scams

Criminals often impersonate IRS employees and sound very convincing when calling taxpayers in aggressive and sophisticated ways. Taxpayers should stay vigilant and be alert to scams when dealing with taxes.

The IRS usually contacts taxpayers with a letter in the mail explaining what they owe and how to question or appeal what they owe. The IRS will not call, text or contact anyone via social media, specifically, to demand immediate tax payment.

If taxpayers are unsure whether they owe money to the IRS, they can view their tax information using their Online Account on IRS.gov.

Taxpayers can avoid mistakes and receive a timely refund by preparing to file their tax return ahead of time. Here are a few things taxpayers can do to get ready:

• Gather records: Good recordkeeping makes preparing a tax return easier. Organized tax records can help taxpayers find overlooked deductions and credits.
• Start with IRS.gov: IRS.gov is available 24/7, and it’s the fastest way to get help. Millions of people use IRS.gov to file and pay taxes and get information about their accounts or answers to tax questions. The IRS Services Guide outlines the many ways taxpayers can get help from the IRS.
• Use online tools: IRS.gov has many useful online tools. One of them – the Interactive Tax Assistant – provides answers to many tax questions specific to an individual’s circumstances. It gives the same answers that an IRS representative would give over the phone.
• Choose a reputable preparer: Tax preparers have different levels of skills, education and expertise. The IRS Directory of Federal Tax Return Preparers can help taxpayers find tax preparers in their area who hold professional credentials recognized by the IRS or who participate in the IRS filing season program.
• File electronically: The IRS encourages people to file their tax returns electronically and choose direct deposit for refunds. Filing electronically reduces tax return errors as the tax software does the calculations, flags common errors and prompts taxpayers for missing information.
• Choose direct deposit: Choosing direct deposit is a fast, reliable and secure way to receive a refund. Taxpayers can have their refund deposited into one, two or even three accounts. According to Treasury’s Bureau of the Fiscal Service, paper refund checks are 16 times more likely to have an issue, like the check being lost, misdirected, stolen or uncashed.
• Report all income: Take time to know what is taxable and nontaxable income. Taxpayers must report their income from all sources, including the gig economy, Forms 1099 and Forms W-2, Wage and Tax Statements.
• Report unemployment benefits: Taxpayers who received unemployment benefits must report the amount received as taxable income on their tax return.
• Accurate returns: Taxpayers should take extra time to review their tax return so they can file a complete and accurate return and avoid refund delays. Check all names and Social Security numbers as well as, account and routing numbers needed to get a direct deposit.
• Review Publication 17, Your Federal Income Tax: This guide covers the general rules for filing a federal income tax return. Available in English and Spanish on IRS.gov, and translations in Russian, Vietnamese, Korean and Chinese – simplified and traditional – will be available soon. The new format makes it easier to navigate and faster to download.

As people prepare to file their 2024 tax return, the IRS reminds taxpayers they can find answers to their tax questions from the comfort of their home using IRS online tools and resources. These IRS.gov tools are easy to use, available 24 hours a day and help taxpayers get ready to file.

• IRS Free File: Nearly everyone can file their tax return electronically for free. The software does all the work of finding deductions, credits and exemptions. It’s free for those who earned $84,000 or less in 2024. Some of the Free File packages also offer free state tax return preparation.
• Choosing a preparer: The IRS has several options for finding a tax preparer. One resource is Choosing a Tax Professional, which offers a wealth of information for selecting a tax professional. This resource can help taxpayers find preparers in their area who currently hold professional credentials recognized by the IRS or who have an Annual Filing Season Program Record of Completion.
• Interactive tax assistant: This tool answers even more tax questions and help find credits and deductions. It can also help a taxpayer determine if a type of income is taxable. Many people experienced changes to income and other life events in 2024.
• Where’s My Refund?: Taxpayers who filed a return and are waiting for their refund can use “Where’s My Refund?” to check the status of a refund payment. Updates are available within 24 hours after the IRS receives an e-filed return or four weeks after the agency receives a mailed paper return.
• View federal tax account information online: Individuals can visit IRS.gov to set up their account. If they already have a username and password, they can log in to view their federal tax account balance, payment history and key information from their most recent tax return as originally filed. Before accessing their account for the first time, taxpayers must authenticate their identity through the secure access process.
• Paying a tax bill: The IRS offers several ways for taxpayers to pay their taxes including online or by phone. Direct Pay and IRS Online Account are free and safe ways to pay taxes or estimated tax directly from a checking or savings account. Pay by debit, credit card or digital wallet options are available, providers change a fee, not the IRS.

Taxpayers can check out many other tools and resources online at IRS.gov.

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Disaster relief can be authorized by the IRS when certain criteria from the Federal Emergency Management Agency are met. Generally, the IRS will authorize disaster tax relief to all areas identified on a major disaster declaration if FEMA identifies at least one area qualifying for their Individual Assistance program.

Those who have been affected by a disaster can visit Tax relief in disaster situations on IRS.gov for information on what tax relief applies to them and other resources that will help them recover.

Tax relief
The following types of tax relief are a few of the ways the IRS helps after a major disaster.

• The IRS gives taxpayers more time to file and pay: Taxpayers whose address of record is in an area qualifying for IRS disaster tax relief will automatically receive extra time from the IRS to file returns and pay taxes. The IRS’s disaster assistance page provides updates and links to resources. Information is also available on the IRS X account (formerly Twitter). Taxpayers can also call the agency’s disaster line at 866-532-5227 with questions.
• Disaster victims may qualify for a casualty loss tax deduction: Affected people who have lost or damaged property due to a federally declared disaster may qualify to claim a casualty loss deduction. They can claim this on their current or prior-year tax return. This may result in a larger refund.
• Taxpayers can apply for a disaster loan or grant: The Small Business Administration offers financial help to business owners, homeowners and renters in a federally declared disaster area. To qualify, a taxpayer must have filed all required tax returns.

What taxpayers need to do
Taxpayers may also need to access their tax records or notify the IRS if they’ve relocated.

Get a tax transcript
People who need a tax transcript to support their disaster claims can get free transcripts by using Get Transcript to access their transcripts immediately online or to request mail delivery. They can also call 800-908-9946 to request mail delivery or submit Form 4506-T, Request for Transcript of Tax Return.

People who need a copy of their tax return should file Form 4506, Request for Copy of Tax Return. The IRS waives the usual fees and expedites requests for copies of tax returns for people who need them to apply for disaster-related benefits or to file amended returns claiming disaster-related losses. If filing Forms 4506-T or 4506, the taxpayer should state on the form the request is disaster related and list the state and type of event. The taxpayer’s ability to provide this information helps to speed up the process.

Notify the IRS of any change of address
After a disaster, people might need to temporarily relocate. Those who move should notify the IRS of their new address by submitting Form 8822, Change of Address, or call the IRS Disaster Hotline at 866-562-5227.

The IRS encourages affected taxpayers to review all federal disaster relief at DisasterAssistance.gov.

The deadline for taxpayers who requested an extension to file is Oct. 15, 2024, and some may choose to hire a tax return preparer. Those who do need to understand how to choose a tax preparer wisely and how to work with them.

What to consider when choosing a tax return preparer

Taxpayers should keep these things in mind when looking for a tax return preparer.

• Make sure the preparer is available year-round. If questions come up about a tax return, taxpayers may need to contact the preparer after the filing season is over.

• Review the preparer’s history. Taxpayers can check with the Better Business Bureau for information about the preparer, including any disciplinary actions and the license status for credentialed preparers. Other resources include the State Board of Accountancy’s website for CPAs and the State Bar Association for attorneys. Taxpayers can also check the IRS Directory of Federal Tax Return Preparers for enrolled agents or verify an enrolled agent’s status online.

• Ask about service fees. Taxpayers should avoid tax return preparers who base their fees on a percentage of the refund or who offer to deposit all or part of the refund into their own financial accounts. Be wary of tax return preparers who claim they can get larger refunds than their competitors.

• Ensure their preparer offers IRS e-file. The IRS issues most refunds in fewer than 21 days for taxpayers who file electronically and choose direct deposit.

• Understand the preparer’s credentials and qualifications. Attorneys, CPAs and enrolled agents can represent any client before the IRS in any situation. The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help identify many preparers by type of credential or qualification. Tax return preparers who participate in the Annual Filing Season Program may represent taxpayers in limited situations if they prepared and signed the tax return.

Tips for working with a tax preparer
These are a few things taxpayers should keep in mind when they work with a tax preparer:

• Good preparers ask to see records and receipts. They’ll also ask questions to determine the client’s total income, deductions, tax credits and other items. Taxpayers should avoid a tax return preparer who e-files using pay stubs instead of W-2s. This is against IRS rules.

• Taxpayers should review the tax return before signing it. They should ask questions if something is unclear or inaccurate.

• Any refund should go directly to the taxpayer – not into the preparer’s bank account. Taxpayers should make sure the routing and bank account numbers on the completed return are accurate.

• Taxpayers are responsible for filing a complete and correct tax return. They should never sign a blank or incomplete return and never hire a tax return preparer who asks them to do so.

• Ensure the preparer signs and includes their PTIN. By law, anyone who is paid to prepare or help prepare federal tax returns must have a valid Preparer Tax Identification Number, and they must sign and use that PTIN on any tax return they prepare. Not doing so is a red flag that the paid preparer may be looking to make a quick profit. Taxpayers should avoid these unethical tax return preparers.

Report misconduct
Taxpayers can report tax preparer misconduct to the IRS.

WASHINGTON — The Internal Revenue Service today announced tax relief for individuals and businesses in four states affected by Hurricane Debby.

Affected taxpayers in South Carolina, North Carolina, Florida and Georgia now have until Feb. 3, 2025, to file various federal individual and business tax returns and make tax payments.

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). Currently, this applies to:

• All 46 counties in South Carolina.
• The following 61 counties in Florida: Alachua, Baker, Bay, Bradford, Brevard, Calhoun, Charlotte, Citrus, Clay, Collier, Columbia, DeSoto, Dixie, Duval, Escambia, Flagler, Franklin, Gadsden, Gilchrist, Glades, Gulf, Hamilton, Hardee, Hendry, Hernando, Highlands, Hillsborough, Holmes, Jackson, Jefferson, Lafayette, Lake, Lee, Leon, Levy, Liberty, Madison, Manatee, Marion, Monroe, Nassau, Okaloosa, Okeechobee, Orange, Osceola, Pasco, Pinellas, Polk, Putnam, Santa Rosa, Sarasota, Seminole, St. Johns, Sumter, Suwannee, Taylor, Union, Volusia, Walton, Wakulla and Washington.
• The following 55 counties in Georgia: Appling, Atkinson, Bacon, Ben Hill, Berrien, Brantley, Brooks, Bryan, Bulloch, Burke, Camden, Candler, Charlton, Chatham, Clinch, Coffee, Colquitt, Cook, Crisp, Decatur, Dodge, Echols, Effingham, Emanuel, Evans, Glynn, Grady, Irwin, Jeff Davis, Jefferson, Jenkins, Johnson, Lanier, Laurens, Liberty, Long, Lowndes, McIntosh, Mitchell, Montgomery, Pierce, Richmond, Screven, Tattnall, Telfair, Thomas, Tift, Toombs, Treutlen, Turner, Ware, Wayne, Wheeler, Wilcox and Worth.
• The following 66 counties in North Carolina: Alamance, Anson, Beaufort, Bertie, Bladen , Brunswick, Camden, Carteret, Caswell, Chatham, Chowan, Columbus, Craven, Cumberland, Currituck, Dare, Davie, Davidson, Duplin, Durham, Edgecombe, Forsyth, Franklin, Gates, Granville, Greene, Guilford, Halifax, Harnett, Hertford, Hoke, Hyde, Johnston, Jones, Lee, Lenoir, Martin, Montgomery, Moore, Nash, New Hanover, Northampton, Onslow, Orange, Pamlico, Pasquotank, Pender, Perquimans, Person, Pitt, Randolph, Richmond, Robeson, Rockingham, Sampson, Scotland, Stokes, Surry, Tyrrell, Vance, Wake, Warren, Washington, Wayne, Wilson and Yadkin.

Individuals and households that reside or have a business in any one of these localities qualify for tax relief. The same relief will be available to any other counties added later to the disaster area. The current list of eligible localities is always available on the Tax relief in disaster situations page on IRS.gov.

Filing and payment relief 

The tax relief postpones various tax filing and payment deadlines that occurred beginning on Aug. 1, 2024, in Florida, Aug. 4, 2024, in Georgia and South Carolina, and Aug.5, 2024, in North Carolina. The relief period continues through Feb. 3, 2025 (postponement period), in all four states. As a result, affected individuals and businesses will have until Feb. 3, 2025, to file returns and pay any taxes that were originally due during this period.

This means, for example, that the Feb. 3, 2025, deadline will now apply to:

• Any individual, business or tax-exempt organization that has a valid extension to file their 2023 federal return. The IRS noted, however, that payments on these returns are not eligible for the extra time because they were due last spring before the hurricane occurred.
• Quarterly estimated income tax payments normally due on Sept. 16, 2024, and Jan. 15, 2025.
• Quarterly payroll and excise tax returns normally due on Oct. 31, 2024, and Jan. 31, 2025.

In addition, in Florida, penalties for failing to make payroll and excise tax deposits due on or after Aug. 1, 2024, and before Aug. 16, 2024, will be abated, as long as the deposits are made by Aug. 16, 2024. Similarly, in South Carolina and Georgia, penalties for failing to make payroll and excise tax deposits due on or after Aug. 4, 2024, and before Aug. 19, 2024, will be abated, as long as the deposits are made by Aug. 19, 2024. In North Carolina, penalties for failing to make payroll and excise tax deposits due on or after Aug. 5, 2024, and before Aug. 20, 2024, will be abated, as long as the deposits are made by Aug. 20, 2024.

The Disaster assistance and emergency relief for individuals and businessespage has details on other returns, payments and tax-related actions qualifying for relief during the postponement period.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. These taxpayers do not need to contact the agency to get this relief.

It is possible an affected taxpayer may not have an IRS address of record located in the disaster area, for example, because they moved to the disaster area after filing their return. In these unique circumstances, the affected taxpayer could receive a late filing or late payment penalty notice from the IRS for the postponement period. The taxpayer should call the number on the notice to have the penalty abated.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization. Disaster area tax preparers with clients located outside the disaster area can choose to use the Bulk Requests from Practitioners for Disaster Relief option, described on IRS.gov.

Additional tax relief 

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2024 return normally filed next year), or the return for the prior year (the 2023 return filed this year). Taxpayers have extra time – up to six months after the due date of the taxpayer’s federal income tax return for the disaster year (without regard to any extension of time to file) – to make the election. For individual taxpayers, this means Oct. 15, 2025. Be sure to write the FEMA declaration number – 3605-EM for Florida, 3606-EM for South Carolina, 3607-EM for Georgia and 3608-EM for North Carolina − on any return claiming a loss. See Publication 547, Casualties, Disasters, and Thefts, for details.

Qualified disaster relief payments are generally excluded from gross income. In general, this means that affected taxpayers can exclude from their gross income amounts received from a government agency for reasonable and necessary personal, family, living or funeral expenses, as well as for the repair or rehabilitation of their home, or for the repair or replacement of its contents. See Publication 525, Taxable and Nontaxable Income, for details.

Additional relief may be available to affected taxpayers who participate in a retirement plan or individual retirement arrangement (IRA). For example, a taxpayer may be eligible to take a special disaster distribution that would not be subject to the additional 10% early distribution tax and allows the taxpayer to spread the income over three years. Taxpayers may also be eligible to make a hardship withdrawal. Each plan or IRA has specific rules and guidance for their participants to follow.

The IRS may provide additional disaster relief in the future.

The tax relief is part of a coordinated federal response to the damage caused by these storms and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov.

Reminder about tax return preparation options

• Eligible individuals or families can get free help preparing their tax return at Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) sites. To find the closest free tax help site, use the VITA Locator Tool or call 800-906-9887. Note that normally, VITA sites cannot help claim disaster losses.
• To find an AARP Tax-Aide site, use the AARP Site Locator Tool or call 888-227-7669.
• Any individual or family whose adjusted gross income (AGI) was $79,000 or less in 2023 can use IRS Free File’s guided tax software at no cost. There are products in English and Spanish.
• Another Free File option is Free File Fillable Forms. These are electronic federal tax forms, equivalent to a paper 1040 and are designed for taxpayers who are comfortable filling out IRS tax forms. Anyone, regardless of income, can use this option.

• MilTax, a Department of Defense program, offers free return preparation software and electronic filing for federal tax returns and up to three state income tax returns. It’s available for all military members and some veterans, with no income limit.

There are two education tax credits designed to help offset education costs: the American Opportunity Tax Credit and the Lifetime Learning Credit.

Eligibility requirements
For both tax credits, to be eligible:

• The taxpayer, their spouse or their dependents must take post-high school coursework in tax year 2024.
• The student must have a Form 1098-T, Tuition Statement, from an eligible educational institution. There are exceptions for some students.

Things taxpayers should know about the education tax credits.
The American Opportunity Tax Credit is:

• Worth a maximum benefit of up to $2,500 per eligible student.
• Available only for the first four years at an eligible college or vocational school.
• For students pursuing a degree or other recognized education credential.
• Partially refundable. People could get up to $1,000 back.

The Lifetime Learning Credit is:

• Worth a maximum benefit of up to $2,000 per tax return, per year, no matter how many students qualify.
• Available for all years of postsecondary education and for courses to acquire or improve job skills.
• Available for an unlimited number of tax years.

Claiming the credits
To claim either credit, taxpayers must complete Form 8863, Education Credits, and file it with their federal tax return.

When a taxpayer can’t pay their full tax debt or if paying would cause financial hardship, they should consider applying for an Offer in Compromise. For assistance filing for an OIC from a legitimate representative, taxpayers are encouraged to check for a licensed enrolled agent or a reputable accountant in their area.

How an Offer in Compromise works
This is an agreement between a taxpayer and the IRS that settles a tax debt for less than the full amount owed.

The goal is a compromise that’s in the best interest of both the taxpayer and the agency. The Offer in Compromise application includes a fee of $205 and an initial payment. Low-income taxpayers don’t have to pay either the fee or the initial payment. Taxpayers should review the instructions for Form 656-B, Offer in Compromise, to see if they meet the qualifications to have these initial costs waved.

Who’s eligible
Taxpayers can check their eligibility and prepare a preliminary proposal with the Offer in Compromise Pre-Qualifier Tool.

Review the Offer in Compromise booklet
Eligible taxpayers should download and review the latest version of the OIC booklet., to avoid processing delays. This booklet covers everything a taxpayer needs to know about submitting an Offer in Compromise including:

• Eligibility.
• Costs to apply.
• Application process.
• Forms.

Application evaluation
When reviewing applications, the IRS considers the taxpayer’s unique set of facts and special circumstances affecting their ability to pay, including their:

• Income.
• Expenses.
• Asset equity.

Beware of Offer in Compromise mills
Offer in Compromise mills aggressively promote Offers in Compromise in misleading ways to people who clearly don’t meet the qualifications, often costing taxpayers thousands of dollars.

An Offer in Compromise mill usually makes outlandish claims about how they can settle a person’s tax debt for cheap. The promoter fees are often excessive, and eligible taxpayers pay the OIC mill to get the same deal they could have received on their own by working directly with the IRS. This takes unnecessary money out of the taxpayer’s wallet.

In addition, not every taxpayer will qualify for an OIC. Some promoters knowingly advise indebted taxpayers to file an OIC application even though the promoters know the person will not qualify, costing honest taxpayers money and time.