In an earlier blog entry, we wrote about the IRS Offer in Compromise ("OIC"). One of the most misrepresented items in an OIC is the minimum offer. This amount is determined by the reasonable collection potential.
Your reasonable collection potential (RCP) is your magic number. This "RCP" is the amount that, based upon IRS's standards, is the amount of money that the government believes it can collect from you. Your offer amount must equal or exceed this reasonable collection potential amount. This amount is a combination of two separate calculations: