Offer in Compromise Calculator 2026 β IRS Debt Settlement Estimator
Estimate the minimum IRS Offer in Compromise the IRS will accept to settle your tax debt. Calculate Reasonable Collection Potential based on assets, income, and allowable expenses.
$
Include all taxes, penalties, and interest Asset Equity
$
$
Retirement accounts discounted 30% by IRS $
Current market value minus mortgage balance $
Current value minus loan balance $
Business assets, life insurance cash value, etc. Monthly Income & Allowable Expenses
$
All income including wages, benefits, business $
IRS national/local standards: housing, food, transport, health $0
Minimum Acceptable Offer
$0
Potential Savings vs Full Debt
0%
Settlement as % of Debt
$0
Required 20% Deposit (Lump Sum)
$0
Application Fee
$0
Minimum Offer (Periodic)
Reasonable Collection Potential Breakdown
How to Use This Offer in Compromise Calculator
Enter your total tax debt, all asset equity (bank accounts, investments, real estate, vehicles), monthly income, and monthly allowable expenses. The calculator computes your Reasonable Collection Potential (RCP) β the minimum the IRS will accept β for both lump sum and periodic payment options.
The RCP Formula
Asset Equity = Bank + (Investments Γ 0.70) + Real Estate + Vehicle + Other
Monthly Disposable Income = Monthly Income β Allowable Expenses
Lump Sum Minimum Offer = Asset Equity + (Disposable Income Γ 12)
Periodic Minimum Offer = Asset Equity + (Disposable Income Γ 24)
Lump Sum Deposit = Minimum Offer Γ 20% (submitted with application)
Monthly Disposable Income = Monthly Income β Allowable Expenses
Lump Sum Minimum Offer = Asset Equity + (Disposable Income Γ 12)
Periodic Minimum Offer = Asset Equity + (Disposable Income Γ 24)
Lump Sum Deposit = Minimum Offer Γ 20% (submitted with application)
Example
$50,000 debt | $18,000 assets | $500/month disposable income | Lump sum:
Asset equity: $18,000
Income multiplier: $500 Γ 12 = $6,000
Minimum offer: $18,000 + $6,000 = $24,000
Required deposit: $24,000 Γ 20% = $4,800
Savings: $50,000 β $24,000 = $26,000 (52% reduction)
Asset equity: $18,000
Income multiplier: $500 Γ 12 = $6,000
Minimum offer: $18,000 + $6,000 = $24,000
Required deposit: $24,000 Γ 20% = $4,800
Savings: $50,000 β $24,000 = $26,000 (52% reduction)
Extended
OIC Qualification Pre-Check
Checklist of IRS OIC requirements and likelihood of acceptance based on your inputs
OIC Qualification Pre-Check
The IRS automatically rejects OICs from taxpayers who don't meet basic requirements. Review each item below before applying.
Alternative Resolution Options
| Option | Best For | Total Cost Estimate |
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Frequently Asked Questions
What is an IRS Offer in Compromise?
An Offer in Compromise (OIC) is a program that lets you settle your IRS tax debt for less than the full amount owed. The IRS accepts an OIC when it doubts it can collect the full debt, or when paying in full would create economic hardship. The IRS considers your ability to pay, income, expenses, and asset equity to determine the minimum acceptable offer amount.
How does the IRS calculate the minimum offer amount?
The IRS uses your Reasonable Collection Potential (RCP). For a lump sum offer (paid within 5 months): RCP = net asset equity + (monthly disposable income Γ 12). For a periodic payment offer (paid over 6-24 months): RCP = net asset equity + (monthly disposable income Γ 24). The IRS will not accept less than your RCP, so the lower your disposable income and the fewer assets you have, the better your chances.
How much is the Offer in Compromise application fee?
The IRS charges a $205 application fee. However, if your income is at or below 250% of the federal poverty guidelines, the fee is waived. You must also submit a 20% nonrefundable deposit with a lump-sum offer application β this deposit is applied to the offer amount if accepted, or to your tax debt if rejected.
What expenses does the IRS allow in the OIC calculation?
The IRS uses national and local expense standards, not your actual expenses. These cover: food and clothing (national standard by family size), housing and utilities (local standard by county), transportation (standard car ownership/operating costs), out-of-pocket healthcare, and other expenses like minimum credit card payments and term life insurance premiums. Any expenses above the IRS standards are disallowed.
What are the basic requirements to file an Offer in Compromise?
You must: (1) Have filed all required tax returns, (2) Have made all required estimated tax payments for the current year, (3) Not be in an open bankruptcy proceeding, (4) Be current on any required payroll deposits if you own a business. Failure to meet any of these requirements will result in automatic rejection. The IRS has a Pre-Qualifier Tool on their website to check eligibility before applying.