Unlocking the Secrets of an Offer in Compromise: A Comprehensive Guide Chapter 3 - How Much Do I Offer?
Calculating the Amount of your Offer in Compromise – What is Your Reasonable Collection Potential (RCP)? Drum roll please! This is what you’ve been searching for – how much do I offer? How little can I get away with? Why not low ball them? Here are the two most important concepts to understand before you start your OIC. Key Point 1 - You’re not buying a car or a house. The Settlement Agent does not work on commission. They don’t have to settle and the decision to settle rests entirely with the Settlement Officer. Any offer or counter-offer you make has to be backed up by the numbers. Key Point 2 – Determine your Reasonable Collection Potential before making an offer. Reasonable Collection Potential (RCP) is a key factor considered by the IRS when evaluating an Offer in Compromise (OIC). RCP refers to the amount of money the IRS believes it can collect from a taxpayer based on their assets, income, and future earning potential. The IRS...