Free Tool
Offer in Compromise Calculator
Estimate the minimum the IRS may accept to settle your tax debt — using the same formula the IRS uses, the Reasonable Collection Potential (RCP). It runs privately in your browser. Nothing is saved or sent anywhere.
How it works: the IRS will generally settle for the most it believes it can collect from you before the debt expires — your net asset equity plus your future income (monthly income minus allowable living expenses, times 12 or 24). Enter your numbers below to see a realistic estimate of your offer.
Your estimated Offer in Compromise
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This is an estimate only, generated from the figures you entered, and is not a determination, quote, or guarantee. The IRS uses your actual documented financials and its own expense standards to decide any offer. Run your real numbers with us before applying.
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We'll run your exact figures against the IRS formula, tell you honestly whether an Offer in Compromise is realistic, and map the option that saves you the most. No pressure, no obligation.
How the IRS Calculates an Offer in Compromise
When you submit an Offer in Compromise, the IRS doesn't haggle. It runs a formula called Reasonable Collection Potential, or RCP — the most it believes it could realistically collect from you before your collection statute expires. An offer that meets or beats your RCP is generally accepted; an offer below it is generally rejected. RCP has two parts:
- Net realizable equity in your assets. The IRS uses quick-sale value (typically about 80% of fair market value) minus what you owe on each asset, with a modest equity allowance for vehicles and certain exemptions.
- Future income. Your average monthly income minus your allowable living expenses, multiplied by 12 if you'll pay the offer as a lump sum (within five months) or 24 if you'll pay it over six to 24 months.
Add those two figures together and you have your estimated minimum offer. That's exactly what the calculator above does.
What This Calculator Can — and Can't — Tell You
The estimate is a strong reality check. If your RCP comes out far below your balance, you may be a genuine Offer in Compromise candidate. If it comes out near or above your balance, the IRS will expect close to the full amount, and a payment plan or penalty abatement will usually serve you better.
What the calculator can't do is replace the IRS's detailed review. The IRS applies caps from its Collection Financial Standards (so it may not accept every dollar of expense you claim), values specific assets its own way, and reviews your full Form 656 and Form 433-A (OIC). Two people with identical balances can get very different offers. Treat this number as a starting point — then let us pressure-test it before you spend money applying.
Think You Might Qualify to Settle?
A free, confidential review is the fastest way to know for sure. We'll calculate your real Reasonable Collection Potential and tell you straight whether an Offer in Compromise is your best move.
Offer in Compromise Calculator — Questions, Answered
How is an Offer in Compromise amount calculated?
The IRS bases an acceptable offer on your Reasonable Collection Potential (RCP): the net equity in your assets plus your future monthly income (income minus allowable living expenses) multiplied by 12 for a lump-sum offer or 24 for a periodic-payment offer. This calculator estimates that figure, but the IRS uses your actual documented financials and national/local expense standards to reach the final number.
Is this Offer in Compromise calculator accurate?
It gives a realistic estimate using the same formula the IRS uses, but it is not a determination. The IRS applies quick-sale values, allowable-expense caps from its Collection Financial Standards, and a detailed review of Form 433-A (OIC). Your actual offer can differ. Treat the result as a starting point, then have your numbers reviewed before you apply.
What if the calculator shows the IRS could collect the full balance?
If your estimated collection potential is at or above what you owe, an Offer in Compromise is usually not your best option, because the IRS will expect close to the full amount. A payment plan, penalty abatement, or Currently Not Collectible status may save you more. We can tell you which path fits during a free consultation.
Does using this calculator submit anything to the IRS?
No. The calculation runs entirely in your browser. Nothing you enter is sent to the IRS, saved, or submitted anywhere. It is a private estimate to help you understand whether an Offer in Compromise is worth pursuing.
Results vary based on individual facts and circumstances. This calculator provides a general estimate for educational purposes only and is not tax or legal advice, a determination, or a guarantee of any outcome. Not all taxpayers qualify for an Offer in Compromise. The IRS makes all final determinations based on your documented financial information.
Related: Offer in Compromise (full guide) · IRS Payment Plans · Penalty Abatement · Currently Not Collectible · or return to All Tax Relief Services.