Many taxpayers dream of settling their IRS debt for less through an Offer in Compromise (OIC)—but few understand what really drives approval. It’s not luck or a persuasive letter—it’s math, documentation, and strategy.
At Back Tax Rescue, we’ve submitted countless successful OICs. Here’s what the IRS actually considers when reviewing your offer—and how to improve your chances of acceptance.
🧮 The IRS Formula: Reasonable Collection Potential (RCP)
The IRS doesn’t approve Offers in Compromise based on how badly you want relief. They use a strict formula called Reasonable Collection Potential (RCP).
🧠 RCP = (Monthly Disposable Income × 12) + Realizable Asset Equity
Let’s break that down.
📊 What the IRS Evaluates
| Category | What They Look For | Why It Matters |
|---|---|---|
| Income | Wages, self-employment, benefits, side gigs | IRS wants to know your real earning power |
| Expenses | Rent, food, transportation, child care | Standard allowances apply—excessive expenses may be disallowed |
| Assets | Bank accounts, property, retirement accounts | Anything you could liquidate to pay debt |
| Equity | Home, car, investments | IRS subtracts loans to determine net value |
| Compliance | Past returns and current tax filings | You must be up to date to even be considered |
🚨 Most Common Reasons Offers Are Rejected
- You’re not current on tax filings
➤ Filing compliance is non-negotiable. - Your offer amount is too low
➤ If the IRS calculates you could pay more, they’ll say no. - Missing or weak documentation
➤ Pay stubs, bank records, medical bills—all must support your story. - Unrealistic expenses
➤ Spending $1,200/month on “entertainment” won’t fly. - You’re making too much
➤ If you can reasonably pay over time, the IRS won’t settle.
✅ What Makes an Offer Strong
✔️ You have little to no disposable income
✔️ You’re experiencing financial hardship (job loss, medical issues, etc.)
✔️ Your assets have low equity
✔️ You’re in full IRS compliance
✔️ Your offer amount matches or exceeds your RCP
💡 Example:
John owes $42,000.
- Monthly income: $3,000
- Expenses allowed: $2,750
- Disposable: $250
- Assets after deductions: $1,000
Offer = ($250 × 12) + $1,000 = $4,000
With proof and proper filing, John could resolve $42K for $4K.
🔧 How Back Tax Rescue Builds Winning Offers
We don’t guess—we calculate. Our Enrolled Agents:
🔍 Analyze your IRS transcripts
📑 Prepare accurate Form 433-A (OIC)
💬 Communicate directly with IRS officers
📝 Draft realistic, well-supported OIC packages
📌 Appeal rejections or revise offers if needed
💬 Real Offer in Compromise Win
“I owed $63,000 after a failed business. Back Tax Rescue helped me submit an OIC with all the proof they needed—and the IRS accepted $5,600. Life-changing!”
— L.D., Lilburn, GA
🛡️ Want to Know If You Qualify?
Use our free Offer in Compromise Calculator to get an instant estimate, then schedule a consultation to see if we can lower your tax debt.
📞 Call 470-699-1187
📧 Email: info@backtaxrescue.com
🔗 Book your free consultation
🎯 Back Tax Rescue—When the IRS says pay up, we say negotiate.
