Offer in Compromise 2024: How to Qualify and Submit Your Offer to the IRS

If you owe over $10,000 in back taxes, give us a call at 866-8000-TAX or book a FREE tax relief consultation at choicetaxrelief.com/free-tax-...
Today I am talking about the offer in compromise to the IRS. One of the most popular questions I get from people who owe back taxes to the IRS is, “Logan, what is an offer in compromise? Do I qualify for an offer in compromise? How do I do an offer in compromise?” Those questions and more will be addressed in this video!
➡️ IRS Tax Relief: Do you owe the IRS more than $10,000 in back taxes? Request your FREE tax relief consultation at choicetaxrelief.com/free-tax-...
⬇️ More Tax Relief Videos:
IRS Offer in Compromise Formula: • Offer in Compromise Gu...
How to File Back Taxes and Avoid Penalties: • How to File BACK TAXES...
Table of Contents:
0:00 Offer In Compromise
3:30 What Is An Offer In Compromise?
4:50 "Baseline" Requirements To Qualify
11:45 3 Kinds of Offers in Compromise
12:20 Doubt As To Collectibility
14:25 Doubt As To Liability
15:45 Effective Tax Administration
17:25 Submitting Your Offer In Compromise
19:30 Offer in Compromise Down Payment
20:01 Offer in Compromise Application Fee
20:07 Low-Income Certification
21:40 What to Send to the IRS in Your Offer Package
22:06 Where To Send Your Offer In Compromise
22:38 After You Submit Your Offer In Compromise
22:57 What To Do If Your Offer in Compromise Is Accepted
24:23 What To Do If Your Offer in Compromise Is Rejected
25:20 Deemed Acceptance Rule
26:00 Offer in Compromise and Tax Liens
27:07 Stopping Payments on Installment Agreements
27:43 Submitting a Second Offer in Compromise
27:59 Interest Accrual
28:12 Application of Payments
28:44 Other Offer in Compromise Eligibility Factors
29:18 Stay Tuned for More Offer in Compromise Videos!
#offerincompromise #taxrelief #taxhelp

[@dsheridan4497]

Excellent vid! Best advice from a non-interested tax professional: Hire Logan's team there is just TOO much that could go wrong with a self prepared O & C!

[@LoganAllec]

Thank you! Yes, we just had a call yesterday with a new client who prepared their own offer and it was rejected. Upon reviewing it it was glaringly obvious why...

[@TX-qk5jt]

Patiently waiting for the next episodes on this topic. Thank you!

[@LoganAllec]

Hi. I just released a new hour-long training here on exactly how to calculate the offer in compromise amount: kzbin.info/www/bejne/Z5unm2mvfdOdg6s

[@PeteTaylorRealtor]

Excellent information. Logan, you the man. Appreciate you giving your expertise.

[@LoganAllec]

Thanks, Pete!

[@vickigrilli4822]

Great video, sounds like right up my alley!

[@LoganAllec]

Thanks, Vicki!

[@justinneale9405]

Thank you Logan, god bless good video.

[@LoganAllec]

You're welcome, Justin!

[@gerrygrzywinskl6135]

Love watching your video

[@LoganAllec]

Thanks, Gerry!

[@brendacissney7245]

Thank you Logan God bless you an your family.

[@LoganAllec]

Thanks, Brenda!

[@brendacissney7245]

Logan you are welcome

[@Phantom.1]

Fantastic!

[@LoganAllec]

Thank you!

[@markdoyle777]

Great video, Logan!! Hope to be hiring you soon to help me with my back taxes.

[@LoganAllec]

Thanks, Mark! Email me anytime!

[@renescootz]

Thank you

[@LoganAllec]

You're welcome, Rene!

[@showtime95667]

Interesting We owe 63k. I spoke to someone said if you own property and have assets any pic would be rejected. That only option would be be to ask for interest and penalty which would save only $2k and she would charge $4k

[@k-onrocks2303]

Hi Logan, very good and valuable information for people who owe back taxes! It's great for you to go into great detail, explaining options and requirements for offer and compromise, with the IRS! I'm sure this video will help a lot of people, who find themselves in this situation! I will share this video, if I hear of someone in this situation, who could use your help! I learned a lot from watching this video 👍! I hope you have a very good Friday! Kathy from Houston 🤠🙏🏻💖🇺🇸

[@LoganAllec]

Hi Kathy! Thank you! I know a lot of people owe back taxes, so I hope to help them through these videos.

[@k-onrocks2303]

@@LoganAllec That's great! My niece received her package from me, sent to Alabama yesterday! She had a baby girl on April 22nd!! I expect the packages being sent to you should arrive in the next day of so, for Hunter and baby boy#2!! Blessings to everyone!!🤗

[@LoganAllec]

@@k-onrocks2303 Aw, thank you! We are checking our P.O. box today!

[@k-onrocks2303]

@@LoganAllec your very welcome!! Hopefully, it will arrive today!! 🤗

[@LoganAllec]

➡️ Book your FREE tax relief consultation TODAY at choicetaxrelief.com/free-consultation/ or call 866-8000-TAX NOW!

[@robertbridge2629]

well done

[@LoganAllec]

Thanks, Robert!

[@margom.8901]

Great video! It would be great to know in your FAQ if your income is very low, and you can only pay a minimal amount if you qualify for an Offer & Compromise.

[@LoganAllec]

Hi Margo. Yes, that is possible. In fact, people who are having a tough time financially are the exact kind of person the offer in compromise was created for.

[@machinary20]

Good, this a good topic logan. Good idea, I do not owe the Irs, but I owe the unemployment and they take my refunds. Could you and youre people help

[@jonport_]

Just book led a time to talk! I have tax debt and it’s stressing me out. Hopefully we can work together

[@JeradGardnerOffical]

Can I factor in owed debts from my closed bussiness that has the tax debt in my oic? Such as vendor debt, SBA loan, utilities owed, other loans, rent owed, ect?

[@expatron]

Great Video, thank you. Just a couple of questions regarding OIC. First I am a 69 year old expat and have been living in Thailand for the past 8 years, will this affect my chances of getting approved? Second, I have just recently submitted my 2022 1040 along with a request for a ITIN for my spouse, they have received it, however the return has not been processed, do I need to wait until it's processed?

[@LoganAllec]

This video covers the basics of how the offer in compromise process works. If you'd like a more detailed training on exactly how much to offer in compromise to the IRS, check out this other video: kzbin.info/www/bejne/Z5unm2mvfdOdg6s Also, be sure to call 866-8000-829 to book your FREE tax relief consultation!

[@tiamcnear4745]

Hi Logan, what is the best way to contact you.

[@LoganAllec]

@@tiamcnear4745 Please email at [e-mail]

[@desiluv03]

Can I do an OIC if I’ve defaulted on a regular payment plan

[@Ocean_boypump]

@@tiamcnear4745 Thanks for watching📩📩 we appreciate your feedback, contact the number above 👆👆 for major insights on Crypto..

[@justinneale9405]

Awesomely Logan.

[@LoganAllec]

Thanks, Justin!

[@justinneale9405]

@@LoganAllec hey Logan hope your OK, hope the family is well.

[@LoganAllec]

@@justinneale9405 Thanks, spending a lot more time with them these days!

[@justinneale9405]

@@LoganAllec cool

[@wendyschmidt4339]

💕🌹🙏🏻 Thank you

[@LoganAllec]

You're welcome, Wendy!

[@alishaleehan9695]

Wow! Great info exactly what I needed to see. I currently owe 35K and haven’t filed this year or last.. how can I go about a consultation? I want to figure out how to resolve this but I’m living check to check like most people - last I heard they had me on non collectable status

[@LoganAllec]

Hi Alisha. I see you filled out a form. If no one's reached out yet, please book a free consultation at choicetaxrelief.com/free-consultation/ to book a time this week!

[@1artisan]

Do you have a video for CNC yet?

[@LoganAllec]

Working on it. Video giving a general overview of tax relief strategy (OICs, CNCs, PPIAs) should be coming out this week. Then I hope to do separate standalone videos on CNC and PPIA, similar to what I did for OIC.

[@robertosavy3018]

Awesome 👍💯👍💯🆒🆒🆒🆒💯🆒💯😎 your house Todd

[@LoganAllec]

Thanks, Roberto!

[@amandawest8441]

I have a question we sent an offer in compromise and it was rejected because it said we needed 2 forms do you know if that's because I had back tax debt before I was married and then when I was married there was a few years that we were also including in the offer

[@oopsieeee]

Question: If you have a repayment agreement can you still submit an offer in compromise?

[@LoganAllec]

Hi there. I assume you're referring to an installment agreement. If so, yes, you can still submit an offer in compromise even if you are currently paying on an installment agreement.

[@moramora6976]

Hi how many years of refunds the IRS takes from me they accept the offer in 2020

[@brooklynbad5114]

Mr Logan I'm from NYC and this video is so informative. I have never taken my phone to the bathroom so I don't miss the beat. question I owe about $15,000 in taxes from the 2020 year. synopsis my tax accountant put my pension for my job on the schedule C and she upped my mileage expense. which I don't know why but that's a whole different conversation. I don't think I will qualify for offer and compromise is there a way I can set up a payment plan I guess for the next so many years. example 250 a month

[@LoganAllec]

Hi Brooklyn. Yes, I think the IRS would accept $250/month in your case because that would full pay your liability over 72 months.

[@yorocco1]

Thanks. Helpful. I have a question. I don’t have tax returns for 2015, 16, 17 and 19 because I had a health crisis in 2014 and was unable to work and subsequently had to go on disability. I simply didn’t make enough to file. Is this considered “missing tax returns”? Also, I am confused about estimated taxes. If I could have paid estimated taxes, I wouldn’t be asking for an offer in compromise.

[@LoganAllec]

If you did not have a filing requirement for certain years, you don't have to file those years. Those years aren't considered "missing" because they weren't required to be filed in the first place. Your offer in compromise is for already-assessed tax debt (i.e. back taxes), not for tax debt for the current or future years. In order to not default on your offer in compromise for your back taxes, you need to stay in compliance (both in terms of filings and payments) for your current and future tax debt for at least five years.

[@lunaroja32]

Hi, do you have any insight on having a previous installment agreement and you do get approved? Do they take into account what you’ve paid? Does one have to do a separate offer in compromise for separate tax years or would one cover prior years of tax due? Thanks!

[@LoganAllec]

Hi Martha. Those are great questions. Your installment agreement goes on pause while your offer in compromise is being considered. If your offer is accepted, you obviously don't have to pay that installment agreement anymore. An offer in compromise by nature settles *all* of a taxpayer's tax debt for all years they owe - there is not a separate one for each year. Yes, they take into account what you paid in previous installment agreements in calculating the total balance you are compromising with your offer.

[@marieneu264]

How do you feel about all these company’s on commercials and on Google ads that promise to help you. Is it better to just try by yourself first?

[@LoganAllec]

It depends! If someone has a relatively straightforward situation, it might be better to just do it oneself.

[@williambowman7244]

First yahoo auto notification working right here

[@LoganAllec]

That's great to hear!

[@susanpeters1628]

I hold Power of Attorney for a friend in prison. His income is about $500 per month. Can I file an Offer of Compromise for him with an offer of zero?

[@kennethvandelinde3240]

Hi Logan, is there a statute of limitations on back taxes, if no oh well if so how many years does it have to be....thanks

[@LoganAllec]

Hi Kenneth. Yes, there is a statute of limitations on back taxes. The IRS can only collect on back taxes for 10 years from the date of assessment, which is typically triggered by the filing of a tax return or the filing of an IRS-prepared substitute for return (if the taxpayer did not file their own return). I wrote an article about it on my firm's website: choicetaxrelief.com/irs/statute-of-limitations/

[@EdgarHernandez-tl5il]

What’s the negative impact of OIC. Credit wise or License with the state

[@LoganAllec]

An offer in compromise has no effect on one's credit nor on state licenses.

[@joyceroberts8566]

Logan Help!!

[@LoganAllec]

Hi Joyce. What do you need help with?

[@05leena10]

Filed separately. Deceased spouse's have Federal lien

[@admperry1]

Thank you, Logan. I will need your help this upcoming tax year for 2022. I have been a Gig worker, (1099) delivery driver and care driver. I am saving as many receipts and each month calculating my earnings and expenses. Not sure when I should contact you, to pull this altogether... :) I'll call the number above!

[@ev7991]

Do you pay monthly before they sent accepted letter ? they cashed the first check with applications?

[@LoganAllec]

With the lump sum cash offer, you must make a 20% down payment with your offer. Then you can wait until your offer is accepted. With the periodic payment offer, you must make monthly payments while the IRS is considering your offer. Note that these requirements are waived if you qualify for low-income certification as described at 20:07.

[@crowmoon9922]

Thank you so much for this! So I am at the beginning stages of getting together the paperwork for the OIC. In the video you said after sending out your OIC continue making monthly payments, however, I haven't made any payments yet bc I cannot afford to do so at this time. Do I just wait the 6 months for a response? I owe a little over $1900 Thank you so much!

[@LoganAllec]

Hi. Are you referring to payments for the offer in compromise or to payments under an existing installment agreement? Also, which kind of offer are you submitting - lump sum or periodic payment?

[@crowmoon9922]

@@LoganAllec oh gosh, I'm so sorry I did not specify. I am talking about the payments for the OIC & for periodic payments. Thank you!

[@LoganAllec]

@@crowmoon9922 You must submit your first monthly payment under the terms of the offer along with your offer and continue to make payments under the terms of the offer while the IRS is considering your offer. Note that these amounts are payments of tax and will be applied to your balance *even if* the IRS rejects your offer. As that webpage says, you have the right to designate which tax year you want each payment to go to. It's generally a good idea to designate your payments to the newest tax years in case the IRS rejects your offer. There is a big exception if you qualify for low-income certification, in which case you do NOT need to make monthly payments while the IRS is considering your offer. If the IRS accepts your offer, your first payment is due 30 calendar days after the acceptance. See on page 3 (PDF page 5) of the Form 656-B: www.irs.gov/pub/irs-pdf/f656b.pdf - see under Payment Options > Periodic Payment Hope that helps!

[@crowmoon9922]

@@LoganAllec thank you so very much Logan! You're a doll. 😊 it's people like you that we need more of in this world. Your wealth of knowledge and generosity are thoroughly appreciated.

[@mzjamaica]

Great video, I called the IRS yesterday, and after holding for an hour to speak to someone, rep kept advising me to fill out form 433-f. Should I submit this form then do the 656 OIC?

[@LoganAllec]

If you qualify for an offer in compromise, there's no need to fill out the Form 433-F. The forms you need are the Form 433-A (OIC) and the Form 656.

[@KBELL28]

656 booklet states that you don’t have to pay monthly installments while OIC is being processed. Is this correct?

[@LoganAllec]

If you qualify for low-income certification (see 20:07 for what this means) you do not have to submit any payments until your offer is accepted. So in that case, no, you don't have to pay monthly installments while the offer is being evaluated. If you do not qualify for low-income certification and you are paying over 24 months (periodic payment offer), you must continue to make monthly payments while the IRS is evaluating your offer (see page 5 of Form 656 Booklet). If you do not qualify for low-income certification and you are paying over five months (lump sum cash), you must submit a 20% down payment with your offer but do not have to make further payments while the IRS is evaluating your offer.

[@eramirez4736]

I used the OIC pre-qualifier online and got Option 1: Pay $200 within 5 months Option 2: Pay $200 over a 6-24 month period Did i do something wrong

[@LoganAllec]

Hi Estefania. I can't really speak to your individual situation or the accuracy of your inputs into the pre-qualifier.

[@nancygumtow4017]

Will the IRS take out whatIcwe in taxes with the money I paid on my unemployment from last year ?

[@spazzulu3802]

Yes.

[@Cali8842]

Is it true oic creates a public record? From what I’m reading on it, it does.

[@LoganAllec]

Not that I'm aware of. Please share where you read that :)

[@Cali8842]

@@LoganAllec on the irs.gov….. It says, the IRS makes available for public inspection a copy of form 7249, offer acceptance report , for one year after the date of acceptance. It appears you have to request this file, so I don’t think that it appears on your credit report under public records, but if a company or individual wanted to verify or view this for any reason, they could submit a request for the offer in compromise public inspection report.

[@LukeSkywaker]

How much will your service cost?

[@LoganAllec]

Hi Luke. This depends on a variety of factors. We generally give a quote in our initial free consultation.

[@davidlennear3112]

What happens if you have money in your 401k and then you subtract the loan amount but the remaining funds are not acceptable as a withdrawal from your fund ? Meaning that you cannot touch them because you have a loan already ?

[@lissettreynaga2750]

I have the exact question.

[@LoganAllec]

I have not had a client with this particular issue but depending on circumstances I would not include this amount in your RCP but would disclose this 401(k) to the IRS when completing the 433-A (OIC) but note to the IRS that your residual amount (net of loan) is inaccessible and show proof of inaccessibility from your 401(k) provider.

[@musafa24]

what if you are in a payment arrangement with the IRS

[@LoganAllec]

If you're in a payment arrangement with the IRS, it will be put on hold while the IRS is reviewing your offer. You can book a free consultation at choicetaxrelief.com/free-consultation/

[@sl3724]

Does having an IRA account disqualify you?

[@LoganAllec]

Nope. It all depends on the figures. Sometimes we make the argument that the taxpayer is older and Social Security won't cover their living expenses for the remainder of their life expectancy and so it would create a hardship to demand they pay their taxes from their IRA. Even for younger folks. it all depends on the balance of the IRA vs. the liability.

[@g357iamthetacticaltrucker5]

I have just received the paperwork for the offer in compromise, but was told if my offer is rejected the 20% of what I offer down is NOT put towards the debt. It's kept by IRS if they deny offer, how is this allowed? This is robbery !

[@LoganAllec]

The 20% of what you offer is certainly applied to the debt. See www.irs.gov/taxtopics/tc204/ under Payment Options > Lump Sum Cash Offer: "The 20 percent payment is generally nonrefundable, meaning it won't be returned to the taxpayer even if the offer is rejected or returned to the taxpayer without acceptance. Instead, the 20 percent payment will be applied to the taxpayer's tax liability. The taxpayer has a right to specify the particular tax liability to which the IRS will apply the 20 percent payment."

[@g357iamthetacticaltrucker5]

@@LoganAllec Thanks, so the IRS rep lied, how can I contact you for services

[@LoganAllec]

@@g357iamthetacticaltrucker5 So these videos have brought in more work than I could have anticipated and I am completely booked. But I've vetted a few other CPAs and the one I trust the most for tax resolution is James Cha [e-mail] - go ahead and email him and let him know I sent you. Thanks.

[@fernandotejeda2238]

If I co-signed for someone do I still have to list it under properties or assets even is someone else is making the payments on the vehicle?

[@LoganAllec]

Hi Fernando. Thanks for the question. The answer is no, you wouldn't include this asset under properties or assets since you are not on title for the vehicle. You cosigned, but you are not an owner, so it's not your asset.

[@fernandotejeda2238]

@@LoganAllec thank you for getting back to me. I guess I need to amend my offer if that’s even possible because I listed it as an asset since my name is on the loan.

[@MrScrappydue]

I sold on eBay back in 2017 and I didn’t do taxes. I owed $1,500 but now it’s up to $3,000 for interest and penalties. I thought of calling and asking if they would accept the original amount since I’m on SSDI. Do you think that’s okay? I don’t have any assets like a car but I do have 4K in the bank. I really need a car but I want to take care of this debt first.

[@LoganAllec]

So the IRS filed your 2017 return for you?

[@MrScrappydue]

@@LoganAllec I assume that’s what they did. I basically said I paid for those comics and paid shipping. It’s just thousands of sales that I don’t know how to add up and no tax man wanted my case. But out of the $25K I made, I’d say it was actually about 5-7K I may have earned. I had asked PayPal if I’d have to pay taxes but I asked in May and what I should have asked, will I ever have to pay taxes. That was my ignorance.

[@ann7856]

Can they collect when you are on disability

[@LoganAllec]

Unfortunately, yes, they can. They can no longer *automatically* levy disability payments, but they can still manually levy them.

[@lostandlooking]

I am 30, homeless, no assets nor income. I live in Mexico doing volunteer work in exchange for room and board. I received a CP2000 stating that I owe 21K from 2019. In 2019, I was living in Latin America and discovered dropshipping. I had over 50K in sales in about 45 days and had no idea what I was doing. I was oblivious to paying taxes and it was online and I was not living in the USA.

[@LoganAllec]

Hi Lost and Looking. You sound like someone we can help. Book a call at choicetaxrelief.com/free-consultation/

[@LukeSkywaker]

I tried reaching out to you via email, but the address given didn't work. What is your e-mail address? Please give it here in writing.

[@LoganAllec]

Hi Luke. Thanks for reaching out. I believe you were able to contact me. My email is taxrelief @ loganallec.com

[@johnpierson9801]

Toilet 🚽

[@LoganAllec]

💩

[@rogerreyes9768]

I want to contact you.

[@LoganAllec]

Hi Roger! Please email me at [e-mail]

[@charleabythesea]

Thank you