Tax Settlement

An OIC based on Doubt as to Collectability applies when you simply don’t have the financial ability to pay your full tax liability, even over time. When tax debt overwhelms your income or essential living expenses, or exceeds your available assets, settlement options may provide relief. Eligibility is based on your “Reasonable Collection Potential” (RCP).

Reasonable Collection Potential (RCP)

The IRS calculates your Reasonable Collection Potential (RCP) — monthly disposable income over a set period plus net asset equity — to decide if your offer is acceptable. Your RCP is calculated by adding your monthly disposable income (income minus allowable living expenses) multiplied by a set number of months to the equity in your assets. If your RCP is less than the total tax bill, you may qualify.

Income Documentation

• Pay stubs, W-2s/1099s, bank statements
• Proof of any irregular or seasonal income

Expense Verification

• IRS Allowable Expense Guidelines (e.g., housing, utilities, transportation)
• Extraordinary costs: uninsured medical bills, childcare, or eldercare

How Optima Tax Relief Helps

We perform a detailed RCP calculation to determine your precise offer amount. Our team gathers and vets every necessary document, ensuring IRS acceptance of your income and expense figures. We prepare and file IRS Form 656 (Offer in Compromise) and Form 433‑A/B (Collection Information Statement) with professional accuracy, reducing delays and errors.

If there is a legitimate question about whether you owe the tax debt under the law, you can contest the amount through an OIC.

Common Disputes

• Misreported income (e.g., employer reporting errors)
• Disallowed deductions or credits (e.g., business expenses, education credits)

Evidence Required

• Primary source documents substantiating your position based on the issue at hand
• Supporting tax law

How Optima Tax Relief Helps

Our tax professionals meticulously compare IRS transcripts to your original filings to identify every discrepancy. We draft the legal and factual arguments needed to support your case, including cover letters and exhibits. If you’ve received an IRS audit letter or collection notice, our team can represent you before the IRS and manage all communications and documentation.

When standard IRS expense allowances don’t reflect your true hardship, you can request additional relief under Effective Tax Administration with Exceptional Circumstances.

Qualifying Situations

• Serious illness or medical condition requiring ongoing care
• Advanced age combined with fixed or limited income
• Disability limiting earning capacity
• Dependent care costs (elderly, disabled, or minor dependents)
• Necessary living expenses that reasonably exceed national/local standards

Supporting Documentation

• Primary source documents substantiating your position based on the situations outlined above

How Optima Tax Relief Helps

We develop a documented hardship explanation that links the taxpayer’s specific facts and circumstances to the IRS economic hardship standards. We gather and organize supporting records—such as medical, insurance, or third‑party assistance documentation—to substantiate ongoing necessary expenses. We submit an Offer in Compromise that explains why the applicable standard expense allowances do not reasonably reflect the taxpayer’s actual ability to meet basic living needs.