There is no standalone IRS form called an “income worksheet” or an “expense worksheet” for an Offer in Compromise — searchers use those phrases for one worksheet inside the Form 656-B booklet, which combines your assets, your income, and your (IRS-capped) expenses into a single output: your minimum offer amount. This page is that worksheet, explained and worked end to end: the income side, the expense side (which is where the IRS standards do their damage), and the combination. Practice here, then enter final figures on Form 433-A or 433-B — and cross-check the result in the calculator.
General tax information, not tax or legal advice. Federal IRS worksheet only; states issue their own (North Carolina’s OIC-101 series is the document most search results actually show — a state worksheet, not this one).
List all monthly household income, gross:
The worksheet allows necessary living expenses, capped by the Collection Financial Standards:
| Category | How the allowance is set |
|---|---|
| Food, clothing, misc. | National standard by family size (fixed table) |
| Housing & utilities | Local standard by county and family size |
| Vehicle ownership | National allowance per vehicle (up to 2) |
| Vehicle operating costs | Regional standard (fuel, insurance, maintenance) or public-transit allowance |
| Health insurance & out-of-pocket medical | Actual, documented |
| Court-ordered payments, childcare, current taxes | Actual, documented |
| Credit-card payments, private tuition, voluntary retirement contributions | Not allowable (the most common worksheet disappointment) |
| Total allowable expenses subtracted from total income = monthly remaining income (the worksheet’s Box F figure on the 433 forms). |
Net realizable equity, asset by asset: quick-sale value (80% of market value for most assets) minus debt owed on it; bank cash reduced by the $1,000 exclusion + one month of allowable expenses. The total is the worksheet’s asset component (Box A on the 433 forms).
Minimum offer = Asset component (Box A) + [Monthly remaining income (Box F) × 12 or × 24] (Future income, Boxes G/H) ×12 if you will file a lump-sum offer; ×24 for periodic (why the multiplier doubles).
Household of 3; filer owes $41,500.
If my spouse doesn’t owe the taxes, do I include their income in my 433-A OIC? Yes — household income goes on the worksheet/form because expenses are shared; the IRS FAQ confirms total household income is required, with the non-liable spouse’s share of income and expenses allocated in the analysis. The debt remains yours alone.
Do I qualify for the low income certification? Decided from these same income figures: household income at or below 250% of the federal poverty level (Form 656 chart) certifies you, waiving the fee and in-review payments (fee page; IRS FAQ).
What are the most common mistakes people make when they apply for an offer in compromise? On the worksheet specifically: claiming expenses above the standards, omitting assets or income the statements reveal, and not averaging self-employment income — Seattle Tax Attorney’s OIC FAQ names expense/asset omissions as its top answer. Full catalogue: application mistakes.
General tax information, not tax or legal advice. Sources: Form 656-B booklet worksheet; Forms 433-A/433-B (OIC) computation boxes; IRS Collection Financial Standards; IRS OIC Pre-Qualifier (income/expense screens); IRS OIC FAQs; Seattle Tax Attorney FAQ (question). Reviewed 2026-10-22.