Estimate the minimum settlement the IRS may accept using the same Reasonable Collection Potential formula the agency uses to evaluate every offer.
Bank balances, vehicle equity, home equity, retirement, and other assets.
An Offer in Compromise (OIC) is an agreement with the IRS that lets qualifying taxpayers settle their tax debt for less than the full amount owed. It exists for people who genuinely cannot pay their full balance, or for whom paying in full would create financial hardship. The IRS doesn't accept an offer simply because you ask — it accepts an offer when the amount you propose equals or exceeds what it could realistically collect from you over time. That number is called your Reasonable Collection Potential.
Your RCP has two parts: the net realizable equity in your assets, plus a portion of your future income. This estimator computes your monthly disposable income as your total monthly household income minus your allowable monthly living expenses. It then multiplies that disposable amount by a factor based on how you plan to pay, and adds your total asset equity. The result is the approximate minimum the IRS would expect to receive — the floor for a realistic offer.
A lump-sum cash offer is paid in five or fewer installments within five months of acceptance, and the IRS multiplies your monthly disposable income by 12. A periodic payment offer is paid over 6 to 24 months, and the IRS multiplies your disposable income by 24 — so the future-income portion is larger. A lump-sum offer also requires a 20% down payment submitted with your application. Choosing the right structure can meaningfully change the total you propose.
Most applicants must pay a $205 application fee, which is waived if you meet the IRS low-income certification guidelines. You must be current with all filing and estimated-payment requirements before the IRS will even consider your offer. You are not eligible if you are in an open bankruptcy proceeding, and the IRS will return any offer when you have unfiled tax returns. These exclusions catch many applicants by surprise, so confirm your filing status first.
The IRS rejects a large share of offers, usually because the proposed amount is below the taxpayer's calculated RCP, because expenses were claimed that exceed national and local allowable standards, or because the taxpayer wasn't in filing compliance. You can strengthen an offer by documenting every allowable expense, ensuring all returns are filed, choosing a realistic payment structure, and proposing an amount at or above your true RCP. A lower monthly disposable income — even $0 — reduces the future-income portion of your RCP and can make an offer more achievable. This estimate is for planning only and is not a guarantee of acceptance; the IRS verifies every figure independently.
Limited — OIC eligibility and the offer amount depend on a detailed financial analysis. This is a rough screening estimate, not a determination of acceptance.
Last updated: June 2026
This tool provides educational information only. It does not constitute legal advice and should not be relied upon as such. For legal advice regarding your specific situation, consult a licensed attorney.
This tool is for educational purposes only. It does not constitute tax advice. Results are estimates based on general information. For advice specific to your tax situation, consult a qualified tax professional, enrolled agent, CPA, or tax attorney.
See our Methodology and Data Sources for more information.
This content is based on the following authoritative sources. All sources are regularly verified for accuracy.
26 U.S.C. § 7122
Internal Revenue Service
Internal Revenue Service