Offer in Compromise Pre-Qualifier Calculator

ANA›Life Services Authority›National Calculator Authority›Offer in Compromise Pre-Qualifier Calculator

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Offer in Compromise Pre-Qualifier Calculator

This tool estimates whether you may qualify for an IRS Offer in Compromise (OIC) by calculating your Reasonable Collection Potential (RCP) and comparing it to your total tax debt. An OIC allows eligible taxpayers to settle their tax debt for less than the full amount owed.

### Tax Debt

Total Tax Debt Owed ($)

### Assets (Quick Sale Value)

Enter the quick sale value (typically 80% of fair market value) of each asset.

Bank / Savings Accounts ($)

Investments / Stocks / Retirement Accounts ($)

Real Estate Equity (Quick Sale Value) ($)

Vehicle Equity (Quick Sale Value) ($)

Other Assets ($)

### Monthly Income

Total Monthly Gross Household Income ($)

### Monthly Allowable Living Expenses

Use IRS National and Local Standards for allowable expenses. Enter your actual allowable amounts below.

Food, Clothing & Other (IRS National Standard) ($)

Housing & Utilities (IRS Local Standard) ($)

Transportation (IRS Local Standard) ($)

Out-of-Pocket Health Care ($)

Other Allowable Expenses (court-ordered payments, etc.) ($)

### Payment Terms

Proposed Payment Option

Lump Sum Cash (paid within 5 months) — multiply monthly surplus by 12 Periodic Payment (paid within 6–24 months) — multiply monthly surplus by 24

Calculate

function offCalc() { // --- Inputs --- var taxDebt = parseFloat(document.getElementById('off-tax-debt').value) || 0; var bankAccounts = parseFloat(document.getElementById('off-bank-accounts').value) || 0; var investments = parseFloat(document.getElementById('off-investments').value) || 0; var realEstate = parseFloat(document.getElementById('off-real-estate').value) || 0; var vehicles = parseFloat(document.getElementById('off-vehicles').value) || 0; var otherAssets = parseFloat(document.getElementById('off-other-assets').value) || 0; var grossIncome = parseFloat(document.getElementById('off-gross-income').value) || 0; var foodClothing = parseFloat(document.getElementById('off-food-clothing').value) || 0; var housing = parseFloat(document.getElementById('off-housing').value) || 0; var transportation= parseFloat(document.getElementById('off-transportation').value) || 0; var healthCare = parseFloat(document.getElementById('off-health-care').value) || 0; var otherExpenses = parseFloat(document.getElementById('off-other-expenses').value) || 0; var paymentOption = document.getElementById('off-payment-option').value;

// --- Validation --- var errors = []; if (taxDebt 0) { resultDiv.className = 'calc-result calc-error'; resultDiv.innerHTML = 'Please fix the following errors:' + errors.map(function(e){ return ''; }).join('') + ''; return; }

// --- Step 1: Total Asset Equity (Quick Sale Value) --- var totalAssets = bankAccounts + investments + realEstate + vehicles + otherAssets;

// --- Step 2: Total Monthly Allowable Expenses --- var totalExpenses = foodClothing + housing + transportation + healthCare + otherExpenses;

// --- Step 3: Monthly Disposable Income (Net Monthly Income) --- // IRS: Net Monthly Income = Gross Income - Allowable Expenses var monthlyDisposable = grossIncome - totalExpenses; if (monthlyDisposable ';

function row(label, value, bold) { return '' + '' + label + '' + '' + value + ''; }

html += row('Total Tax Debt', fmt(taxDebt)); html += 'Asset Equity'; html += row('Bank / Savings Accounts', fmt(bankAccounts)); html += row('Investments / Retirement', fmt(investments)); html += row('Real Estate Equity', fmt(realEstate)); html += row('Vehicle Equity', fmt(vehicles)); html += row('Other Assets', fmt(otherAssets)); html += row('Total Asset Equity', fmt(totalAssets), true); html += 'Future Income'; html += row('Monthly Gross Income', fmt(grossIncome)); html += row('Total Allowable Monthly Expenses', fmt(totalExpenses)); html += row('Monthly Disposable Income', fmt(monthlyDisposable)); html += row('Payment Multiplier (' + (paymentOption==='lump'?'Lump Sum x12':'Periodic x24') + ')', 'x' + multiplier); html += row('Future Income Component', fmt(futureIncomeComponent), true); html += 'OIC Summary'; html += row('Reasonable Collection Potential (RCP)', fmt(rcp), true); html += row('Minimum Offer Amount (= RCP)', fmt(minimumOffer), true);

if (qualifies) { html += row('Potential Savings vs. Full Debt', fmt(savings > 0 ? savings : 0), true); }

html += '';

if (qualifies) { html += 'Your Reasonable Collection Potential (' + fmt(rcp) + ') is less than your total tax debt (' + fmt(taxDebt) + '). ' + 'You may be eligible to submit an OIC to the IRS for approximately ' + fmt(minimumOffer) + '. ' + 'Consult a tax professional before submitting Form 656.

'; } else { html += 'Your Reasonable Collection Potential (' + fmt(rcp) + ') equals or exceeds your total tax debt (' + fmt(taxDebt) + '). ' + 'The IRS expects you can pay your full liability. Consider an Installment Agreement or Currently Not Collectible status instead.

'; }

resultDiv.className = 'calc-result'; resultDiv.innerHTML = html; }

#### Formula

Reasonable Collection Potential (RCP) is the core metric the IRS uses to evaluate an OIC:

Total Asset Equity = Bank Accounts + Investments + Real Estate Equity + Vehicle Equity + Other Assets (each at Quick Sale Value ≈ 80% of Fair Market Value)

Monthly Disposable = Monthly Gross Income − Total Allowable Monthly Expenses Income (MDI) (Allowable expenses per IRS National & Local Standards)

Future Income = MDI × Payment Multiplier Component Lump Sum Cash (≤5 months): MDI × 12 Periodic Payment (6–24 months): MDI × 24

RCP (Minimum Offer) = Total Asset Equity + Future Income Component

Pre-Qualifier Test = RCP < Total Tax Debt → May Qualify RCP ≥ Total Tax Debt → Likely Does Not Qualify

#### Assumptions & References

IRS Collection Financial Standards: irs.gov - IRS OIC Pre-Qualifier Tool: irs.treasury.gov

More Calculators

References

The law belongs to the people. Georgia v. Public.Resource.Org, 590 U.S. (2020)

Related Authorities

Life Services Authority › Professional Services Authority › Trade Services Authority › United States Authority ›