Tax Settlement Timeline Calculator
Calculate timeline and milestones for IRS settlement options: OIC, CNC, IA, Partial Payment.
Status & Circumstances
Financial Summary
Total Debt:$ 50000
Disposable Income:$ 500/mo
Asset Equity:$ 8000
RCP:$ 50000
Years Remaining:7
Settlement:OIC
RCP exceeds debt - consider reducing assets or IA
Settlement Timeline Phases
| Phase | Duration | Description | Milestone |
|---|---|---|---|
| Pre-Application Preparation | 2-4 weeks | Gather financial documentation, calculate RCP, determine offer amount | Complete Forms 433-A/B and Form 656 |
| Application Submission | 1-2 weeks | Submit OIC package with $205 application fee and 20% payment | IRS receives application, assigns to examiner |
| Initial Review | 2-4 weeks | IRS reviews for processability, checks compliance status | IRS sends acceptance letter or returns for deficiencies |
| Financial Investigation | 4-12 months | Examiner verifies assets, income, expenses, calculates RCP | IRS may request additional documentation |
| Offer Negotiation | 2-6 months | IRS proposes counter-offer if RCP exceeds submitted offer | Negotiation or acceptance of offer amount |
| Final Decision | 1-2 months | IRS issues acceptance, rejection, or appeal rights | Form 656-L or rejection letter |
| Payment Period | 5-24 months | Pay agreed amount per terms (lump sum or periodic) | All payments completed |
| Lien Release | 30 days after payment | IRS releases lien upon full payment of offer | Certificate of Release issued |
Total Timeline: 24 months
Settlement Options Comparison
| Option | Timeline | Total Paid | Debt Remaining |
|---|---|---|---|
| Offer in Compromise | 12-24 months + payment | $15000 (offer amount) | $0 |
| Currently Not Collectible | 7 years (wait for CSED) | $0 | $50000 (expires with CSED) |
| Installment Agreement | 100 months | $50000 + interest | $0 |
| Partial Payment IA | 7 years | $21000 | $29000 forgiven |
Success Factors
| Factor | Status | Impact |
|---|---|---|
| Tax Compliance | Good | Essential for OIC, helps all options |
| Disposable Income | Has Payment Ability | Enables IA/PPIA |
| RCP vs Debt | OIC Unlikely | RCP $50000 exceeds debt |
| Collection Period Left | Moderate | 7 years remaining affects settlement approach |
Recommendation
OIC unlikely. RCP ($50000) equals or exceeds debt ($50000). Consider IA instead, or reduce RCP by spending assets, increasing allowable expenses. OIC rejection rate high when RCP > debt.
Settlement Timeline Key Points
- OIC: 12-24 months typical
- CNC: Wait for CSED expiration
- IA: Based on payment amount
- PPIA: Until CSED expires
- Compliance required for OIC
- RCP determines OIC viability
- Document everything thoroughly
- Respond timely to IRS requests
- Professional help recommended
- Maintain compliance throughout