You must indicate the payment terms for your Offer in Compromise. The payment terms begin from the date that the IRS accepts and approves your Offer in Compromise.

Payment terms available:

• Cash Payment
• Short Term Deferred Payment
• Deferred Payment

Cash Payment

Pay the full amount of your Offer in Compromise within 10, 30, 60, or 90 days from the date of written notice that the IRS accepted your Offer.

This is the preferred payment option. I strongly encourage taxpayers to choose the 90-day payment option, as this generally gives them enough time to come up with money to pay off the IRS.

Short Term Deferred Payment

Pay the full amount of the Offer in Compromise within 24 months from the date of written notice that the IRS accepted your Offer. You may specify a lump sum payment within 90 days, and then monthly installment payments of up to 24 months from the date of acceptance.

Deferred Payment Offer

Pay the full amount of the Offer in Compromise over the remaining life on the collection statute of limitations. You may specify a lump sum payment due within 90 days, and then monthly installment payments for the remainder of the collection period. The normal collection statute of limitations is 10 years (or 120 months), from the date that a tax liability was finalized. This 10-year period may have been extended or suspended by various actions taken by the IRS or by the taxpayer. Filing an Offer in Compromise suspends the 10-year period while the IRS processes the Offer in Compromise.

You should negotiate with the IRS very carefully to make sure the collection period is fully defined in the terms of your Offer agreement.

Source of Funds

The taxpayer must indicate where the money will come from to pay the IRS. Let the IRS know exactly how you plan to raise enough cash to pay your Offer. For example, you can say that you plan to sell your house, or that you will be getting loans or gifts from your family, or that you intend to refinance your mortgage.