# The IRS offer in compromise pre-qualifier, step by step

Source: https://backtaxesdesk.com/tax-debt-relief/offer-in-compromise-pre-qualifier
Publisher: Back Taxes Desk (backtaxesdesk.com), independent editorial site
Topic: Tax Debt Relief
Last updated: 2026-09-18

> The offer in compromise pre-qualifier is a free IRS web tool at IRS.gov/OICtool that asks about your filing status, assets, income and expenses, then tells you whether you may qualify and estimates a minimum offer. The result is only a guide: it does not bind the IRS, and it does not file anything for you.

## Key facts

- Cost to use: Free
- Where: IRS.gov/OICtool, or the eligibility check in your IRS Individual Online Account
- Binding?: No. It is a guide only
- Offer formula: Asset equity plus monthly surplus times 12 (lump sum) or 24 (periodic)
- Not available for: Partnerships, corporations, US territory or foreign residents, APO/FPO addresses

## What the offer in compromise pre-qualifier checks

The offer in compromise pre-qualifier is the IRS's own free screening tool for settling a tax debt for less than the full amount. It runs the same math the IRS uses on Form 433-A (OIC) and gives you instant feedback on whether an offer looks realistic. You can open it at IRS.gov/OICtool, or run the matching eligibility check inside your IRS Individual Online Account.

The tool starts with four yes-or-no screening questions. They mirror the IRS eligibility rules, so an answer that fails any of them means an offer would not be considered yet.

1. Are you in an open bankruptcy proceeding? (Must be no.)
2. Have you filed all required federal tax returns? (Must be yes.)
3. Have you made all required estimated tax payments for this year? (Must be yes.)
4. If you are self-employed with employees, have you made all required federal tax deposits? (Must be yes.)

After the screening it moves through six stages: status, basic information, assets, income, expenses and proposal. The tool is not built for partnerships, corporations, residents of US territories or foreign countries, or people with APO or FPO military addresses. Those taxpayers work straight from the Form 656-B booklet instead.

## How the offer in compromise calculator figures your number

The pre-qualifier works as an offer in compromise calculator. It adds two things: the equity you could turn into cash, and the money left over each month after IRS-allowed living expenses. That total is your reasonable collection potential, the smallest offer the IRS would normally accept.

- **Cash and bank accounts:** total balances minus a $1,000 allowance for individuals.
- **Vehicles, real estate, retirement and other assets:** current market value times 0.8 (a quick-sale value), minus any loan. The first $3,450 of equity in a car is excluded, or two cars on a joint offer.
- **Monthly surplus:** gross household income minus allowable expenses, never below zero.
- **Future income:** the surplus times 12 if you pay a lump-sum offer within five months, or times 24 if you pay over 6 to 24 months.

The $1,000 and $3,450 allowances are applied only to individuals, and only after the IRS finds you cannot pay the debt in full from assets and a payment plan.

### A worked example

Take a single filer who owes $30,000. The figures below are illustrative, not a promise of what the IRS will accept, but they follow the Form 433-A (OIC) steps.

| Item | Figure | Counted |
| --- | --- | --- |
| Bank balances | $2,400 | $1,400 after the $1,000 allowance |
| Car worth $10,000 with a $5,000 loan | $8,000 quick-sale value minus $5,000 | $0 after the $3,450 exclusion |
| Monthly surplus after allowed expenses | $150 | $1,800 (lump sum, x12) or $3,600 (periodic, x24) |
| Minimum offer, lump sum |  | $3,200 |
| Minimum offer, periodic |  | $5,000 |

Illustrative minimum offer for a single filer owing $30,000

Paying faster lowers the number, because the tool counts only 12 months of surplus instead of 24. In this example a lump-sum offer would need $640 (20%) sent with the application, plus the $205 fee.

## Information to gather before you open the IRS OIC pre-qualifier

The tool saves time only if your numbers are real. Pull the figures below before you start so the estimate matches what you would later put on Form 433-A (OIC).

For expenses, the IRS does not simply accept what you spend. Food, clothing, housekeeping, personal care and miscellaneous costs use national standards; for example, $867 a month for a one-person household from June 29, 2026. Housing and car costs use local standards, and you get the lower of the standard or your actual cost. Our [Form 433-F guide](https://backtaxesdesk.com/tax-debt-relief/form-433-f) explains the standards in more detail.

> **Use your household, not just yourself:** If you share a home, list total household income and expenses. The IRS may work out your share of shared costs, and leaving a partner's income out will make the estimate too low.

## Is the pre-qualifier result binding?

No. The IRS describes the tool as a guide only, and the Form 656-B booklet says a favorable result does not guarantee that an offer will be accepted. An offer examiner will verify your statements, ask for documents, and may value your assets or expenses differently.

The reverse is true too. If the tool says you can pay in full, you may still file an offer and explain circumstances it cannot capture, such as a serious illness or a job that is about to end. Form 656 asks whether you used the tool, but using it is recommended, not required.

## Reading the result and next steps either way

### If the tool says you may qualify

1. Print or save the result page and your inputs so your Form 433-A (OIC) matches.
2. Check whether your household income is at or below the Low-Income Certification chart in Form 656 ($39,900 for one person in the 48 contiguous states); if so, you skip the fee and upfront payments.
3. Complete Form 433-A (OIC) and Form 656 from the current Form 656-B booklet, and attach the supporting documents it lists.
4. Choose lump sum or periodic payment and include the $205 fee and initial payment unless you are low-income certified.
5. Keep filing and paying current taxes while the offer is pending; a missed return can get the offer returned.

### What if it says I don't qualify?

A no usually means your assets or monthly surplus could pay the full balance over time. That points to a payment plan, not a settlement. If you truly have no surplus at all, ask about [Currently Not Collectible status](https://backtaxesdesk.com/tax-debt-relief/currently-not-collectible). Compare every route on our [tax debt relief options](https://backtaxesdesk.com/tax-debt-relief) page.

If the no came from a screening question, fix that first. File any missing returns, catch up on this year's estimated payments, then run the tool again. Our [offer in compromise](https://backtaxesdesk.com/tax-debt-relief/offer-in-compromise) page covers the full filing process once you pass.

> **Paid pre-qualification is not needed:** Some relief firms charge to tell you whether you qualify. The IRS tool is free, and the IRS warns about offer mills that charge high fees to people unlikely to qualify. See our guide to [tax relief scams](https://backtaxesdesk.com/tax-help/tax-relief-scams).

## Common questions

### Is the IRS offer in compromise pre-qualifier free?

Yes. The IRS tool at IRS.gov/OICtool is free to use. The same eligibility check is also available in your IRS Individual Online Account.

### Does using the pre-qualifier notify the IRS or start collection?

No. The tool gives you an estimate on screen and does not submit an offer. Nothing is filed until you mail or send Form 656 with the required forms.

### Can married couples use the pre-qualifier together?

Yes, the tool asks for your filing status and household information. Couples who are legally separated and living apart, divorced, or who owe separate tax debts must submit separate offers.

### Why does the pre-qualifier say I can pay in full when I cannot afford it?

The tool counts 80% of your equity in assets and limits expenses to IRS standards. If real costs such as medical bills exceed the standards, document them; you may still file an offer and explain your circumstances.

### Do I have to use the pre-qualifier before filing Form 656?

No. Form 656 asks whether you used the tool or the online account eligibility check, but the IRS lists it as recommended, not mandatory.

## Sources

- [Offer in Compromise](https://www.irs.gov/payments/offer-in-compromise)
- [Offer in Compromise Pre-Qualifier](https://irs.treasury.gov/oic_pre_qualifier/)
- [Form 656-B, Offer in Compromise Booklet](https://www.irs.gov/pub/irs-pdf/f656b.pdf)
- [National Standards: Food, Clothing and Other Items](https://www.irs.gov/businesses/small-businesses-self-employed/national-standards-food-clothing-and-other-items)
- [Dirty Dozen tax scams for 2026](https://www.irs.gov/newsroom/dirty-dozen-tax-scams-for-2026-irs-reminds-taxpayers-to-watch-out-for-dangerous-threats)