IRS Offer in Compromise Calculator
Calculate offer amount to settle tax debt for less than full amount.
OIC Eligibility
Eligible:Likely Yes
Type:doubt_collectibility
Must: filed all returns, not in bankruptcy, current on estimated taxes.
Collection Potential Calculation
Monthly Income:$ 5000
Expenses:$ 3500
Disposable:$ 1500
Asset Equity:$ 15000
Quick Sale (20% off):$ 12000
IRS allows 20% quick sale discount on asset equity value.
Offer Amounts by Payment Option
| Option | Months | Offer Amount | Note |
|---|---|---|---|
| Lump Sum | 5 | $ 19500 | Pay in 5 months, lowest offer |
| Short-Term | 24 | $ 48000 | Pay over 24 months |
| Deferred | 120 | $ 192000 | Pay over statute period |
Lump sum: lowest offer, pay in 5 months. Longer payment = higher offer.
Offer vs Debt Comparison
Debt:$ 50000
Offer:$ 19500
Savings:$ 30500
Offer should represent reasonable collection potential (RICS).
Application Fee
Fee:$ 186
Waived:No
$186 non-refundable application fee. Waived for low-income taxpayers.
Recommendation
Submit offer around $19500 for lump sum option
IRS typically accepts offers that represent true collection potential.
Success Factors
- Offer significantly below debt
- Cannot pay in full
Offer in Compromise Key Points
- Doubt as to Collectibility: most common
- Formula: Assets + Future Income
- Quick sale: 20% discount
- Lump sum: lowest offer (5 mo)
- Short-term: 24 months
- Deferred: statute period
- $186 application fee
- Low income: fee waived
- File Forms 656 + 433-A
- Process: 12-24 months