Offer in Compromise Calculator
See if you qualify to settle your tax debt for significantly less than you owe using our free IRS OIC Calculator and Pre Qualifier Tool. Get your estimate in minutes based on current IRS standards. This quick assessment evaluates your eligibility and estimates a potential settlement amount based on IRS standards. Call today to learn more about your options!
Free Offer In Compromise Pre Qualifier Tool
Find out if you qualify for significant tax debt relief in just 3 simple steps.
Step 1: Tax Debt & Household
Tell us about your tax situation and household
Your OIC Results
Based on official IRS calculation formulas
LUMP SUM PAYMENT OPTION
$0
PERIODIC PAYMENT OPTION
$0
Calculation Breakdown
Monthly Disposable Income (MDI)
$0/month
Income - Allowable ExpensesNet Realizable Equity (NRE)
$0
Assets × 80% (Quick Sale Value)Total Tax Debt
$0
Potential Savings (Lump Sum)
$0
Important: This calculator uses official IRS formulas including the 80% Quick Sale Rule for asset valuation (20% discount applied). Actual OIC acceptance depends on IRS review of your complete financial situation.
This calculator is for informational purposes only and does not constitute legal or tax advice.
How much will the IRS accept for an Offer in Compromise?
The IRS does not accept a random amount or a flat percentage; they accept a figure based on your Reasonable Collection Potential (RCP). This amount represents the most the IRS can expect to collect from you within a reasonable period, factoring in your asset equity and future income. If your offer is even a penny less than the calculated RCP, it will likely be rejected unless you can prove special circumstances like extreme economic hardship.
What is the formula for Offer in Compromise?
The “Golden Equation” for an OIC is RCP = Net Realizable Equity (NRE) + Future Income. NRE is the quick-sale value of your assets (typically 80% of fair market value) minus any debts, while future income is your monthly disposable income multiplied by a specific factor. For a lump-sum offer, you multiply your disposable income by 12 months, whereas a periodic payment offer uses a 24-month multiplier.
What is the downside to Offer in Compromise for the IRS?
The primary downside for the IRS is that they agree to permanently forgive a portion of the tax debt, potentially losing out on thousands of dollars in revenue. To mitigate this risk, the IRS requires you to remain perfectly tax-compliant for the next five years; if you fail to file or pay during this time, they can revoke the deal and reinstate the original debt. Additionally, the IRS must invest significant administrative resources into a 7- to 24-month investigation process that only has about a 21–40% success rate.
What is the IRS one-time forgiveness?
What is often called “one-time forgiveness” is actually the First-Time Abatement (FTA) administrative waiver. This program allows the IRS to remove failure-to-file, failure-to-pay, or failure-to-deposit penalties for taxpayers who have a clean compliance history for the three years prior to the penalty year. Starting in 2026, the IRS will begin automatically applying this relief to eligible taxpayers for returns filed for tax years 2025 and later.
What are common OIC mistakes?
Many taxpayers fail because they submit “lowball” offers that fall far below their calculated Reasonable Collection Potential. Other common errors include failing to file all required tax returns before applying or forgetting to include necessary monthly payments while the offer is under review. Additionally, hiding assets or underreporting income is a critical mistake, as the IRS verifies financial statements against public records like DMV and property data.
How long does it take the IRS to approve an offer in compromise?
The entire OIC process typically takes between 7 and 24 months, with an average duration of 12 to 18 months. This timeline includes an initial 1-2 month processing phase, followed by a lengthy financial investigation that can take up to 18 months depending on case complexity. If the IRS does not make a final determination within two years of the receipt date, the offer is legally deemed accepted.
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