OIC Eligibility Calculator
Calculate your Reasonable Collection Potential (RCP) using the same formula the IRS uses to evaluate Offer in Compromise applications. Find out your minimum acceptable offer before you file Form 656.
IRS 2026 Standards Update Postponed
The IRS has officially postponed the 2026 Collection Financial Standards update from April to June 2026 due to Bureau of Labor Statistics data delays. This tool currently utilizes 2025/2026 Transitional Data in accordance with official IRS guidance.
Include 401(k), IRA, pension values
Market value minus mortgage balance
Value minus loan balance
Jewelry, collectibles, business interests, etc.
Understanding the RCP Formula
The Reasonable Collection Potential (RCP) is the formula the IRS uses to determine if an Offer in Compromise is acceptable. It represents the maximum amount the IRS believes it could collect from you over time.
The Formula
RCP = Net Equity in Assets + Future Income
Net Equity = (Market Value × 80% Quick Sale Discount) - Encumbrances
Future Income = Monthly Disposable Income × 12 (lump sum) or 24 (periodic)
Monthly Disposable = Gross Income - IRS Allowed Expenses
The "Lesser Of" Rule
The IRS does not care what you actually spend on housing, transportation, or healthcare. They use National and Local Standardsto determine "necessary" expenses. If your actual expenses exceed these standards, the IRS uses the standard amount instead.
Lump Sum vs. Periodic Payment
- Lump Sum: Pay within 5 months of acceptance. Uses 12 months of future income in the RCP calculation.
- Periodic Payment: Pay over 6-24 months. Uses 24 months of future income, resulting in a higher minimum offer.
When is an OIC Accepted?
The IRS accepts an OIC when the offer amount meets or exceeds the RCP. If your RCP is less than your total tax debt, an OIC may be a viable option. If your RCP equals or exceeds your debt, the IRS will likely reject the offer and pursue full collection.