How OIC qualification works
The IRS considers income, necessary expenses, asset equity, and ability to pay. A low income or a large tax bill alone does not establish eligibility. The financial picture must support the requested settlement, and the taxpayer must satisfy filing and payment requirements.
An open bankruptcy case prevents an OIC application. Required returns and estimated tax payments generally must be current. Employers must also meet federal tax deposit requirements. A valid extension can matter for a current-year return.
The calculation behind an OIC estimate
The published Form 433-A (OIC) worksheet adds available asset equity to future disposable income. The ordinary lump-sum calculation uses 12 months of remaining monthly income. The periodic-payment calculation uses 24 months. A shorter verified collection period can affect these multipliers.
If available equity is $3,000 and remaining monthly income is $100, the worksheet produces $4,200 using 12 months or $5,400 using 24 months. Those figures alone do not establish that the IRS will accept an offer.
The IRS also considers whether the debt can be paid in full within its remaining collection period. A small worksheet amount does not override a demonstrated ability to pay the balance. Special circumstances, disputed liability, and effective tax administration offers need individual analysis.
What happens after the calculator?
Verify balances and collection dates using IRS account records. Gather recent bank statements, pay information, mortgage and vehicle statements, asset valuations, and evidence of necessary expenses. Review Form 656 and the financial statement with a tax attorney, CPA, or enrolled agent if you need assistance.
A submitted offer must be more than $0. There is ordinarily a $205 application fee and an initial payment, with exceptions for qualifying low-income applicants. OIC review can extend the collection period. An accepted offer includes continuing filing and payment obligations.
If an offer is not the best fit
Compare an IRS payment plan, hardship collection delay, and penalty relief. You can use IRS resources directly; hiring a private company is optional.
Find your next step.
Use the free tax relief qualification tool for an initial estimate, then have a licensed tax professional verify your options.
Check my options →Sources & further reading
- IRS Offer in Compromise overview
- IRS Form 433-A (OIC), April 2026
- IRS Form 656-B: Offer in Compromise booklet
- Internal Revenue Manual 5.8.5: Financial Analysis
Sources checked September 30, 2026. Tax rules and allowance amounts can change.