Payment Options with an OIC
If the IRS does accept your compromise, the government will give you three options to pay the money.
One option will be the lump sum payment, although this does not actually mean the whole payment must be made at once. When a taxpayer receives a written notice of acceptance of the OIC, he or she must pay the $150 application fee plus at least 20 percent of what was offered. The 20 percent cannot be refunded. The remaining money must be made in four or less additional payments of from five months or less up to more than two years. The taxpayer must also list the value of his assets.
Individuals can also pay off the money by a short term periodic payment plan. This is paid in installments within 24 months of when the IRS received the offer. In addition, he or she must include the realizable value of assets the IRS could collect over 60 months of payments, mentioning the total amount which could be collected.
Finally, individuals may offer a deferred periodic payment plan. The $150 application fee must be paid, as with all options, and regular payments must be made during the payment term. The IRS may accept he terms under this option, or the OIC Investigator may negotiate different terms, with larger payments, or a shorter payment term.