Free Tool
Offer in Compromise Calculator
Updated
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.
How much should you offer the IRS?
Not a number you choose. An offer in compromise is judged against what the IRS believes it could collect from you before the debt expires, drawn from your income, your assets and your equity. A figure picked because it feels affordable is the most common reason an offer comes back rejected.
That is why this calculator asks what it asks. The output is an estimate of the shape of an offer, not a prediction that one will be accepted, and no honest tool can give you the second thing. The IRS also publishes its own Offer in Compromise Pre-Qualifier, which is worth running alongside this.
What it costs to file an offer, and what you pay up front
Filing is not free, and the money is not refundable if the answer is no:
- A $205 application fee, non-refundable, with each Form 656.
- An initial payment, also non-refundable. With a lump sum offer that is 20% of the total offer, sent with the application, and the rest in five or fewer payments if it is accepted.
- On a periodic offer you send the first payment with the application and keep paying monthly the whole time the IRS is considering it.
- Meet the low income certification and you send neither the fee nor the initial payment.
One rule almost nobody knows, and it is in the IRS's own words: an offer is automatically accepted if the IRS makes no determination within two years of the date it received it, not counting any appeal period. That is not a strategy to rely on, and it is worth understanding before you assume silence means bad news. Checked against IRS.gov on 8 September 2026.
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.
Your estimated Offer in Compromise
$0
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.
Want These Numbers Reviewed by a Tax Pro: Free?
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 the IRS checks before the maths
This calculator models the collection formula. It does not model eligibility, and eligibility comes first. To submit an offer in compromise you need all required tax returns filed and all required estimated payments made, and you cannot be in an open bankruptcy proceeding. Neither is negotiable and neither shows up in any arithmetic.
What the IRS then weighs is ability to pay, income, expenses and asset equity, including equity in bank accounts and other property. Special circumstances can be raised in writing where the standard figures misrepresent a real situation. Before paying anything, run the IRS Offer in Compromise Pre-Qualifier tool and read Form 656-B, the Offer in Compromise booklet, which carries the forms and the rules in one place.
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.
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.
What does an offer in compromise cost and require?
| Item | Lump sum offer | Periodic payment offer |
|---|---|---|
| Application fee | $205, non-refundable | $205, non-refundable |
| Initial payment | 20% of the total offer amount, submitted with the application | The first proposed installment, submitted with the application |
| While the IRS reviews the offer | No further payments required | Continue paying the remaining balance in monthly installments |
| If the IRS accepts | Pay the remaining balance in five or fewer payments | Continue paying monthly until it is paid in full |
| Low income certification | No application fee and no initial payment | No application fee, no initial payment, and no monthly installments during review |
| Forms | Form 656 plus Form 433-A (OIC) for individuals | Form 656 plus Form 433-B (OIC) for businesses |
Figures from IRS, Offer in compromise.
How to use this offer in compromise calculator
- Gather the same figures Form 433-A (OIC) asks for: income, allowable living expenses, and the equity in what you own.
- Use the IRS collection financial standards for the expense side rather than your actual spending.
- Run both payment options, because the lump sum and periodic figures are calculated differently.
- Treat the result as a starting estimate to discuss, not as an amount the IRS has agreed to.
“Lump sum: Submit an initial payment of 20% of the total offer amount with your application.”
— IRS, Offer in compromise
The passage quoted above is from IRS, Offer in compromise.