Payment options A lump-sum cash offer is defined as an offer that is paid in 5 or fewer installments within 5 months or less after the acceptance of the offer. If a taxpayer submits a lump-sum cash offer, they must include in Form 656 a non-refundable payment equivalent to 20 percent of the amount of the offer. If you qualify to apply for an OIC, the IRS will then determine how much it will accept from you to pay off the debt. The amount of the offer is also called reasonable charging potential (RCP).
This is the amount that the IRS can reasonably charge you before the collection statute expires. The IRS has the authority to cancel all or part of your tax debt and to settle with you for less than you owe. This is called a commitment offer or OIC.
