When it comes to paying for your offer in composition (OIC) settlement, there are three different ways to approach this. The first way is a lump sum cash offer. Once you pay the $150.00 application fee you are then required to make a payment of 20% of the offer. Depending on how you look at it, the down or the plus side of this is that you have to pay the offer in five payments or less. Another way is the short term periodic payment offer. Once the IRS receives the offer this plan must be paid within 24 months. Regular payments will be paid while your case is being investigated by the IRS and your first payment is due once you file Form 656. Finally, you have the deferred periodic payment offer. With this plan the first payment must be made with the Form 656 and regular payments will be made while the IRS investigates your case. This offer will be paid with the remaining statutory period.