OIC Pre-Qualifier

How the calculator builds RCP

Net realizable equity discounts each asset's fair market value to quick-sale value, generally 80% of FMV under IRM 5.8.5.4.1, then subtracts any secured debt against it — the calculator floors each asset at $0, never a negative number. Cash and bank balances skip that discount: the IRS counts an individual's total balance less $1,000 (IRM 5.8.5.7). Future income multiplies monthly disposable income (income left after allowable National and Local Standard expenses) by 12 for a lump-sum offer, which the taxpayer pays within 5 months of acceptance, or by 24 for a periodic offer, which the taxpayer pays over 6 to 24 months. RCP is the sum of the two.

Worked example, lump-sum offer: a motorcycle has a $1,200 FMV (quick-sale value $960, no secured debt); a car carries a $9,000 FMV against $4,000 in secured debt (quick-sale value $7,200, net equity $3,200). Net realizable equity totals $4,160. Monthly disposable income of $350, times 12, adds $4,200 in future income.

• Net realizable equity: $4,160
• Future income (×12, lump sum): $4,200
• Total RCP: $8,360

This example assumes no collection statute constraint — see the caveat right below if the account is close to its collection statute expiration date (CSED).

Why RCP can run high near the CSED

Illustration: the worked example above shows $4,200 of future income from 12 months at $350. If that same account has only 7 months left before its CSED, IRM 5.8.4.3.1 caps the real future-income component at 7 months — $2,450, not $4,200 — and the true RCP drops from $8,360 toward roughly $6,610. The calculator does not make this adjustment; checking the CSED first does. At that point, Currently Not Collectible status held to the CSED may resolve the account for less than any offer would.

What counts as monthly disposable income

This calculator takes monthly disposable income as a single input rather than computing it — gross monthly income minus allowable living expenses under the same National, Local Housing, and Local Transportation Standards (IRM 5.15.1) the CNC Eligibility Calculator and Form 433 helper already apply. Run one of those tools first to arrive at the figure, then bring it here. A number a practitioner types in without that step behind it is a guess, not a Form 433-A (OIC) or 433-B (OIC) result.

Low Income Certification

An individual taxpayer below 250% of the federal poverty guidelines can claim the Low Income Certification on Form 656, tested against Form 1040 AGI or Form 433-A (OIC) income. It waives the application fee and all offer payments while the offer is pending, but not the RCP calculation. It also does not extend to a business filing on Form 433-B (OIC), which pays its own application fee and initial payment regardless of income.

When to call a practitioner

• The account sits within a few years of its CSED — this tool does not apply that cap, and the true RCP may be lower.
• The IRS values an asset differently than the inputs entered here, which the agency routinely does using the taxpayer's actual Form 433-A (OIC) or 433-B (OIC).
• The taxpayer qualifies for Low Income Certification and needs the Form 656 fee/payment waiver applied correctly.
• RCP comes out higher than the taxpayer can realistically pay — an Installment Agreement or Currently Not Collectible status may fit better. Try the Installment Agreement Calculator or CNC Eligibility Calculator.

Common Questions