This IRS offer in compromise calculator can help you see whether you're likely to qualify for a settlement on your taxes and give you a rough idea of what you'll need to pay.
It takes just two minutes to get a number, but it's only an estimate. For a detailed analysis that takes into account all of the unique factors of your case, contact the tax attorneys at Wiggam Law. We'll review your case, help you determine whether a settlement is the right option, and secure the lowest possible offer.
Here's how we help with Offers in Compromise.
IRS Settlement Calculator & Pre-Qualifier Tool
How This OIC Calculator Works
This free offer in compromise calculator:
- Asks eligibility questions to ensure you meet the criteria to apply for an offer.
- If so, it asks you for financial details to calculate your Reasonable Collection Potential (RCP) based on the IRS's actual formulas as of 2026.
- Then, it shows you the potential offer the IRS will accept on your tax debt.
IRS Offer in Compromise Calculations
The IRS and the tool use the following formulas to calculate your settlement when you apply for an offer in compromise, depending on whether you pay a lump sum due within 5 months of acceptance or make periodic payments for up to 24 months after acceptance.
Lump sum offer calculation
Equity in Assets + Disposable Income * 12 = Offer
Periodic payment offer calculation
Equity in Assets + Disposable Income * 24 = Offer
Asset Equity & IRS OIC Calculations
The IRS will generally only accept an offer if it includes most or all of the equity in your assets. The agency includes 100% of your cash and cash equivalent assets in your RCP after removing one month’s worth of living expenses plus $1,000. Then, it calculates asset equity using "quick sale" value, typically 80% of the asset, minus the amount owed.
For vehicles, the agency subtracts an additional equity allowance ($3,450 as of 2026). The IRS includes 80% of the value of retirement accounts, or the net value after taxes are considered, whichever amount is lower. .
Disposable Income Calculations
To calculate your disposable income, the IRS starts with your monthly take-home pay after required withdrawals, and then it subtracts your allowable living expenses (ALE). The IRS's ALEs are based on local and national spending standards set annually. The difference is your "disposable income" that the IRS plugs into the OIC formula.
The agency applies national numbers for food, housekeeping supplies, apparel & services, professional care products, and miscellaneous expenses. It also applies a national standard for out-of-pocket healthcare costs, with a higher allowance for taxpayers over age 65. You can claim up to the standards in all of these categories, even if you spend less than that, but you can only go over the standard amounts if you prove the costs are necessary.
The agency also applies national standards for vehicle ownership costs (monthly payments on your car loan) but uses local standards for operating costs (insurance, fuel, parking, etc.). Finally, the agency uses local standards for housing costs (mortgage, rent, utilities, etc). For vehicle and housing costs, the agency lets you claim actual expenses up to the standard. If you spend under the standard, the allowable amount is capped at actual expenses, and you can only go over the standard if extenuating circumstances apply.
Calculation Note for This Free Offer in Compromise Tool
For simplicity, this tool applies the national standards for food, housekeeping, etc., based on the number of people in your home. Then it uses the expenses you entered for housing and vehicles. However, if these expenses exceed the IRS's current allowable living expenses for your area, that will impact your estimate.
IRS 2026 Financial Standards for Housing and Vehicles in GA
As of 2026, the IRS's financial standards for vehicle ownership costs are $703 for one vehicle or $1,406 for a couple. The agency also applies the following local standards in the Atlanta, Georgia area:
- Vehicle operating costs: $319 for one, $638 for two
- Housing costs in Fulton County: $2,354 for one person, $2,764 for two people, $2,913 for three people, $3,248 for four people, $3,300 for five people
- Housing costs in DeKalb County: $2,019 for one person, $2,372 for two people, $2,499 for three people, $2,786 for four people, $2,831 for five people
What Is an Offer in Compromise?
An offer in compromise is when the IRS agrees to accept less than you owe on your tax debt. The offer is based on your assets and income, but the agency also accepts offers based on doubt as to liability (you don't really owe the tax) and effective tax administration (it would be unfair/inequitable for you to pay in full), using different criteria.
An offer in compromise is essentially a form of tax forgiveness, but there are rules. If you don't stay compliant with certain payment or filing obligations over the next few years, the IRS can retroactively rescind the offer.
Do You Qualify for an Offer in Compromise?
If you're applying for an offer based on doubt as to collectibility, you'll likely qualify if the equity in your assets and your disposable income aren't enough to pay the tax due in monthly payments by the time the collection period expires.
However, you also must meet these pre-qualification requirements:
- Up to date on filing returns – if you're behind, you usually just have to do the last five years plus the current year.
- Not in an active bankruptcy case
- Paid estimated taxes or had adequate withholding for the year
The OIC calculator starts with these questions and lets you know what to do if you don't meet these basic pre-qualifications for an offer in compromise.
Details You Can't Get With This Offer in Compromise Calculator
Because an offer in compromise is so complex, an online offer calculator can't account for everything. There are currently no online tools that can help you get an accurate offer – the IRS's tax debt help tool and its OIC pre-qualifier tool have serious limitations.
Even working through the IRS's offer calculations on Form 433-A OIC, included with Form 656 OIC Application, won't necessarily give you an accurate offer amount. Why? Because the form, this free OIC calculator, and most online offer-in-compromise calculators overlook the following:
- Mixed-use or business assets: The IRS may allow you to exclude assets used for business.
- Retirement age: The IRS often excludes retirement accounts if you're retired or close to retirement age.
- Retirement account access: This free calculator uses the value of your retirement accounts times 70% to estimate their cash value after accounting for early withdrawal penalties and income tax, but the number may vary in your situation.
- Non-essential paycheck withholding: The tool asks for your take-home income, but if you have non-essential withholding (for example, voluntary retirement contributions), the agency may use a different (higher) number than you originally provide.
- Age of your tax debt: The age of your tax debt affects your eligibility, your potential offer, and whether you should apply. If your tax debt is about to expire, you may be better off waiting it out. If you have years left and your disposable income is high enough, the IRS may require monthly payments to pay in full, even if a calculator indicates you could qualify for a settlement.
- Healthcare costs: This free calculator automatically applies the IRS's current number for allowable out-of-pocket expenses if you're under age 65. If you're age 65 or older, you qualify for a higher allowance. Also, the agency generally allows you to include your health insurance premiums in full, which may not be included depending on how you pay your premiums and how you calculate your take-home income.
- Extenuating circumstances: The agency will consider all kinds of circumstances that go beyond the numbers. A calculator can't do that on its own, nor can an inexperienced tax pro. For best results, work with a professional who knows how to explain extenuating circumstances to the IRS to get them to accept higher expenses and a lower offer.
FAQ: IRS Offer in Compromise Calculator
How much will the IRS settle for?
Settlements are based on your disposable income and the equity in your assets. An experienced tax attorney can give you an estimate.
How is my offer calculated?
The IRS adds the equity in your assets to your disposable income. It uses 12 months of disposable income for a lump-sum offer and 2 years for a periodic payment offer.
Do I qualify? Can I settle my IRS debt?
You may qualify if you meet the pre-eligibility criteria and you can't afford to pay the debt in full in monthly installments by the collection expiration date.
What is the OIC acceptance rate?
The IRS accepts less than 50% of offer applications every year, meaning the agency usually rejects most OIC applications, but an experienced tax attorney typically has an acceptance rate much closer to 100%. Working with an experienced professional helps your chances of acceptance.
How long does an offer in compromise take?
Anywhere from six months to two years, but generally, once you apply, the IRS must stop all collection actions.
Is the Fresh Start Program the same as an offer in compromise?
No, an offer in compromise is a tax settlement. The Fresh Start Program is what the IRS called a set of changes it made to the offer in compromise program and its collection processes over 15 years ago. However, some offer-in-compromise mills use the phrase "Fresh Start" to refer to tax forgiveness programs like an offer in compromise.
Get a Free Case Review
This free calculator is a solid place to start your research, but for real answers, you need a licensed tax professional. To schedule a case review, contact us at Wiggam Law today to learn more about our offer in compromise services.
We'll pull your transcripts, review your finances, and get an in-depth understanding of all the factors, and then we'll help you resolve your tax debt in the most effective way possible, whether that's through a settlement or another form of IRS tax relief.