The IRS publishes an Offer in Compromise Pre-Qualifier that produces a preliminary estimate based on financial information and filing status. The tool is a guide, not an approval or guarantee; the actual IRS decision depends on a completed application and investigation. A favorable estimate does not mean approval, and an unfavorable result does not bar discussing individual circumstances with the IRS.
What the official record establishes
The Pre-Qualifier is not applicable to partnerships, corporations, residents of US territories or foreign countries, or military APO/FPO addresses. These users are directed to the Form 656-B booklet. This is a tool-scope restriction, not proof those entities are ineligible for an offer. Self-employed individuals can use the calculator. The current Form 433-A(OIC) calculation within the April 2026 booklet adds applicable available asset amounts and future remaining income. Remaining monthly income is multiplied by 12 for offers paid in 5 or fewer payments within 5 months or less, or 24 for 6 to 24 months. These are income multipliers, not numbers of installments. Use correct form definitions, allowable expenses, assets and special circumstances. The business form specifically notes multipliers do not apply if the IRS determines full payment within the legal collection period is possible. Do not turn the formula into an eligibility decision or guarantee.
A practical review worksheet
| Item | Source | Amount or Status | Notes |
|---|---|---|---|
| Available assets (equity in property, bank accounts, investments) | 433-A(OIC) or 433-B(OIC) | ||
| Remaining monthly income (after allowable expenses) | 433-A(OIC) or 433-B(OIC) | ||
| Applicable multiplier (12 or 24) | Payment route and timeline | ||
| Preliminary offer estimate | Calculator or booklet formula | ||
| Collection statute expiration date (CSED) for each assessment | Account transcript | Verify IRS computation |
Review the evidence in order
- Confirm basic readiness. Required returns filed, required estimated payments made, no open bankruptcy. Employers must have made required deposits for the current and last two quarters. The IRS generally does not accept an offer if the debt can be paid in full through a plan or asset equity. Review the current Form 656 and booklet.
- Identify the applicable route. Individuals may submit through Individual Online Account. Businesses and individuals without an account can use the booklet and current mailing directions. Do not mail a duplicate after online submission. Doubt as to liability uses Form 656-L, a separate route.
- Gather current financial information. Use Form 433-A(OIC) for individuals or 433-B(OIC) for businesses. Ordinary 433-A/433-B are not interchangeable with OIC versions. List equity in assets and calculate remaining monthly income after allowable expenses per the current booklet definitions.
- Run the preliminary estimate. Use the official Pre-Qualifier if eligible, or calculate manually using the booklet formula. Note which multiplier applies based on your proposed payment route.
- Check each collection statute expiration date. The IRS generally has 10 years from tax assessment to collect tax and associated penalties and interest. Multiple assessments in one account can have separate CSEDs. The current IRS page on collection time expressly says the CSED can be found on an account transcript; contact the IRS to verify the last day for a specific period or question accuracy. Pending events (installment request, bankruptcy, OIC, CDP, innocent spouse, certain military service, continuous foreign residence) can suspend or extend collection time. Record actual start and end events and obtain the IRS computation.
- Prepare the complete application. Current application fee is $205 plus initial offer payment unless applicable Low-Income Certification. Low-income treatment is for individuals and sole proprietors under current criteria, not corporations, partnerships or deceased individuals. Lump-sum option: initial 20 percent, remaining accepted balance in 5 or fewer payments. Periodic option: initial payment and continuing payments while reviewed unless Low-Income Certification. No guarantee of approval, refund of offer payments, or automatic release of liens or collection on submission. Consult the booklet for exact obligations, applicant rules and separate-offer rules.
- Compare the estimate to remaining collection authority. A preliminary estimate is not an IRS decision. The IRS investigates the completed application and may request additional documentation. Use a tax organizer to track authorization, supporting records and correspondence.
Hypothetical example
Assume available assets of $3,000 and remaining monthly income of $100 already correctly determined under Form 433-A(OIC) definitions. For a lump-sum offer (12-month multiplier): $3,000 + ($100 × 12) = $4,200. For a periodic offer (24-month multiplier): $3,000 + ($100 × 24) = $5,400. These are arithmetic estimates only, with no statement of accepted amount or taxpayer eligibility.
Quality-control checklist
- [ ] Tool scope confirmed (not applicable to partnerships, corporations, territories, foreign countries, APO/FPO)
- [ ] Correct OIC forms (433-A(OIC) or 433-B(OIC), not ordinary 433-A/B)
- [ ] Payment route and multiplier (12 or 24) documented
- [ ] CSED verified on account transcript for each assessment
- [ ] Required returns filed, required estimated payments made, no open bankruptcy
- [ ] Application fee and initial payment route identified (Low-Income Certification if applicable)
- [ ] Preliminary estimate recorded as guide, not approval or promise
- [ ] Form 656 booklet consulted for current rules and submission route
FAQ
Can I use the Pre-Qualifier if I have business-related tax debt?
The tool is not applicable to partnerships or corporations, but self-employed individuals can use it. The business Form 433-B(OIC) specifically notes multipliers do not apply if the IRS determines full payment within the legal collection period is possible. Review the current Form 656-B booklet for business-entity requirements and submission routes.
Does a favorable preliminary estimate mean the IRS will accept my offer?
No. The estimate is a guide based on the financial information you provide. The IRS decision depends on a completed Form 656 application, supporting financial statements, and IRS investigation. An unfavorable or full-pay indication does not bar discussing individual circumstances with the IRS.
How does the collection statute expiration date affect my offer?
The IRS generally has 10 years from tax assessment to collect. The CSED is visible on your account transcript and can be verified with the IRS. Pending events such as an OIC application can extend the collection period. If the IRS determines it can collect the full debt within the remaining legal period, it may reject the offer. Check each assessment separately.
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