IRS Offer in Compromise
Settlement Calculator
Estimate how much you could potentially settle your IRS tax debt for based on the same formula the IRS uses.
How the IRS Calculates Your Settlement
The IRS uses a formula called Reasonable Collection Potential (RCP) to determine the minimum amount they will accept for an Offer in Compromise. This formula considers:
Future Income
Your monthly income minus IRS-allowable expenses, multiplied by 12 months (lump sum) or 24 months (periodic payment).
Asset Equity
The quick-sale value (about 80%) of your assets including cash, home equity, vehicles, retirement accounts, and other property.
Your RCP = Future Income + Asset Equity
If the IRS determines your RCP is less than your total tax debt, and you can demonstrate financial hardship, they may accept an offer at or near your RCP amount.
Disclaimer: This calculator provides estimates based on IRS guidelines. Actual results depend on your complete financial situation, documentation, and IRS review. Consult a tax professional for advice specific to your situation.