Free calculator
IRS Offer in Compromise
Settlement Calculator
An estimate only, built from publicly documented offer-in-compromise inputs. It is not an IRS determination and does not indicate whether an offer would be accepted.
- Takes 2 minutes
- 100% confidential
- Based on IRS Form 656
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
A reduced value for your assets — this tool applies an assumption that is not an IRS-published figure — including 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.