Offer in Compromise Calculator

Estimate your minimum offer

Work through the four steps with your latest bank and loan statements. Leave any line that does not apply blank. Results appear below the button, and nothing you type is sent or saved.

How the calculation works

The IRS says it “generally approve[s] an offer in compromise when the amount you offer represents the most we can expect to collect within a reasonable period of time.” That amount is your reasonable collection potential. The calculator follows Section 8 of Form 433-A (OIC) (Rev. 4-2026 (IRS.gov, 4-2026)), the financial statement individuals send with an offer.

Minimum offer = net realizable equity + (remaining monthly income x 12) for a lump-sum offer, or + (remaining monthly income x 24) for a periodic payment offer.

Step 1: net realizable equity

Equity is what the IRS could reach if your assets were sold quickly. Form 433-A (OIC) values each asset one of two ways:

No line can go below zero, so being underwater on a house does not reduce the equity in your car. The dollar allowances are the ones printed on Form 433-A (OIC) Rev. 4-2026; the IRS updates the form periodically.

Step 2: remaining monthly income

Take your household’s average gross monthly income (wages, Social Security, pensions, net business and rental income and any other regular income, for everyone who contributes) and subtract allowable monthly expenses. For food, clothing and miscellaneous items and for out-of-pocket health care, the form uses the IRS national standard amounts even if you spend less. Housing, utilities and vehicle costs are allowed up to the local standards for your county and household size. You enter those amounts yourself from the IRS pages:

• National Standards: food, clothing and other items
• National Standards: out-of-pocket health care
• Local Standards: housing and utilities
• Local Standards: transportation

Tuition, charitable giving and payments on credit cards and other unsecured loans are generally not allowed. If expenses exceed income, remaining monthly income is zero, not negative.

Step 3: future remaining income

• Lump-sum offer (paid in 5 or fewer payments within 5 months (IRS.gov, April 2026) of acceptance): remaining monthly income x 12.
• Periodic payment offer (paid over 6 to 24 months): remaining monthly income x 24.

Paying faster lowers the minimum because fewer months of income are counted. The form adds one warning: these multipliers and allowances do not apply if the IRS decides you can pay the full balance within the collection period, which is generally 10 years (IRS.gov, 2026) from assessment.

Worked example with assumed figures

Example (assumed figures). A single wage earner owes $60,000 in back taxes, has filed every return and applies alone. These numbers are invented to show the arithmetic, not typical results.

• Lump-sum offer: $300 x 12 = $3,600, so the minimum offer is $12,150 + $3,600 = $15,750. The initial payment is 20% of that, $3,150, sent with the application and the $205 fee; the remaining $12,600 is due after acceptance.
• Periodic offer: $300 x 24 = $7,200, so the minimum offer is $12,150 + $7,200 = $19,350, about $806 a month over 24 months, starting with the application.

In this example an offer is plausible because $15,750 is far below the $60,000 owed. If the same person had $80,000 of home equity, the quick-sale equity alone would exceed the balance and the IRS would expect full payment instead.

Lump-sum vs periodic offers: fees, payments and low-income certification

Low-Income Certification. Individuals whose household income is at or below 250% (IRS.gov, 2026) of the federal poverty level do not pay the application fee, the initial payment or monthly payments during review. Form 656 prints the limits in dollars: $39,900 (IRS.gov, April 2026) for a household of one and $82,500 (IRS.gov, April 2026) for a household of four in the 48 contiguous states (Alaska and Hawaii are higher). Qualifying for the waiver does not change the RCP test: you still have to offer an amount the IRS considers acceptable. The calculator checks your household income against the chart when you enter it.

The IRS keeps your fee and payments and applies them to your balance even if the offer is rejected. It may also keep any refund for a return assessed before the date it accepts your offer, and the offer is deemed accepted if the IRS makes no decision within 2 years (IRS.gov, 2026).

Assumptions and last updated

Last updated: 29 September 2026. Fees, payment rules, multipliers and low-income limits come from our figures registry, which we check against IRS.gov and Form 656-B (Rev. 4-2026 (IRS.gov, 4-2026)) and review every January. The quick-sale factor and dollar allowances are those printed on Form 433-A (OIC) Rev. 4-2026.

• It is an estimate, not an IRS determination. An IRS offer examiner verifies every value, may use a different market value, and may ask for more.
• It does not look up the Collection Financial Standards for you. You enter your allowable expenses; if you enter actual spending above the standards, your estimate will be too low.
• It models an individual or sole proprietor offer (Form 433-A (OIC)). Corporations, partnerships and LLCs use Form 433-B (OIC), which has different lines.
• It does not include special circumstances (serious illness, age, economic hardship) that can justify an offer below RCP, or doubt as to liability offers.
• It runs entirely in your browser. Nothing you type is sent to us, to the IRS or to anyone else, and nothing is saved.

What to do with your result

• RCP at or above your balanceThe IRS will expect full payment. Compare payment plan options.
• RCP well below your balanceRead how the IRS evaluates offers, then run the Pre-Qualifier.
• RCP near zeroCurrently not collectible status may fit better than an offer.
• Penalties are a big part of the balanceRemoving them first can change which option fits.

Before you apply, confirm you are eligible: every required return filed, required estimated payments made, and no open bankruptcy (see Fresh Start qualifications). Then check your numbers with the official IRS Offer in Compromise Pre-Qualifier. Individuals can file an offer through their IRS Online Account or on paper with Form 656 and Form 433-A (OIC).

If you have unfiled years, significant home equity, business assets or special circumstances, a professional review can be worth it. If your numbers are straightforward, the IRS forms and the Pre-Qualifier are designed for you to use yourself. Low Income Taxpayer Clinics help eligible taxpayers for free or a small fee.

Frequently asked questions

Keep reading in the Fresh Start hub

• Offer in compromise under Fresh StartHow the IRS evaluates, accepts or rejects an offer.
• Form 656 step by stepFilling out the offer form, section by section.
• Payment plan calculatorEstimate a monthly payment if an offer does not fit.
• Fresh Start eligibility checkerA few questions to see which options may fit.
• Fresh Start key figures for 2026Every fee, limit and threshold with its IRS source.