Estimate an IRS Offer in Compromise — your reasonable collection potential from disposable income and asset equity.
Educational estimate. IRS interest rates change quarterly; consult a tax professional.
The IRS bases an OIC on your 'reasonable collection potential': monthly disposable income times 12 (lump sum) or 24 (periodic), plus the equity in your assets.
An Offer in Compromise lets you settle IRS debt for less than you owe — but only if you can show the IRS that’s the most it could realistically collect. The formula is your reasonable collection potential: monthly disposable income (income minus allowed living expenses) times 12 or 24, plus the equity in your assets. If your offer beats that number, it has a shot; if you have ample income or assets, the IRS will say no. This estimates the figure before you apply.
By your reasonable collection potential: future disposable income plus asset equity.
Lump sum multiplies disposable income by 12; periodic by 24 — lump sum offers are usually lower.
Only if it equals or exceeds what they could otherwise collect; many offers are rejected.
No — use IRS Form 656 and the prequalifier; this is an estimate.