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Offer in Compromise Help in Southern California (2026)
Short answer: In Southern California you can file an Offer in Compromise yourself after the free IRS Pre-Qualifier, get free or low-cost help from a Low Income Taxpayer Clinic if you qualify, or hire an Enrolled Agent, CPA or attorney. All State Tax Resolution, an Enrolled Agent firm in Los Angeles (Enrolled Agents are licensed by the IRS to represent taxpayers), prepares offers remotely.
What an offer is, and where help comes from
An Offer in Compromise (OIC) settles a tax debt for less than the full balance. The IRS accepts one when the amount offered equals or exceeds your reasonable collection potential (RCP): what it could collect from your assets and future income. Anyone can file one, and the IRS Pre-Qualifier is free. Beyond that, help comes from a Low Income Taxpayer Clinic if you qualify, or from a paid Enrolled Agent, CPA, attorney or national company.
The first question is not who files it but whether your numbers support one. In fiscal 2025 the IRS accepted about 14% of the offers it received.
Your options in Southern California
IRS Pre-Qualifier (irs.treasury.gov/oic_pre_qualifier), then file yourself — Cost: Free tool; $205 application fee unless waived; What it does: A first read on eligibility; you prepare Form 656 and the financial statement
Low Income Taxpayer Clinic — Cost: Free or low cost; What it does: Represents taxpayers under an income limit; IRS Publication 4134 lists clinics
Enrolled Agent — Cost: A fee; What it does: Licensed by the IRS to represent you before Collections, Examination and Appeals
CPA — Cost: A fee; What it does: State-licensed; can represent you before the IRS
Tax attorney — Cost: A fee; What it does: Also represents you in court; needed when there is criminal exposure or litigation
National tax relief company — Cost: A fee; structures vary; What it does: National firms that work by phone; get the fee and the plan in writing before paying
IRS Taxpayer Assistance Centers in Los Angeles County (downtown Los Angeles, El Monte, Van Nuys and Long Beach) work by appointment only through 844-545-5640. They answer account questions and take payments; they do not negotiate on your behalf. The Taxpayer Advocate Service's Los Angeles office, (213) 576-3140, is free and steps in for hardship or when normal IRS channels have failed.
What makes a Southern California offer different
The IRS sets the housing and utilities allowance by county, so the same income can support a different offer in different places. Under the 2026 Collection Financial Standards (effective June 29, 2026), the Los Angeles County housing and utilities standard is $3,525 a month for a family of two and $4,141 for a family of four. Orange, San Diego, Riverside, San Bernardino and Ventura counties have their own figures; look up your county rather than borrowing these. The national standard for food, clothing and other items is the same everywhere: $867 a month for one person and $1,558 for two.
Many Californians also owe the FTB, which runs a separate offer program on Form 4905 PIT (individuals) or 4905 BE (businesses). The FTB acknowledges an offer in about 2 to 4 weeks and generally decides within 4 to 6 months after assignment. It may treat an IRS acceptance as supporting evidence but is not bound by it, so if you owe both, the two offers run in parallel.
The formula in plain words
The IRS accepts an offer when it equals or exceeds your RCP:
RCP = equity in your assets + 12 or 24 months of disposable income
Assets. Quick sale value (generally 80% of fair market value) minus loans, with $1,000 of cash and $3,450 of equity per vehicle excluded.
Disposable income. Income minus allowable living expenses under the Collection Financial Standards, times 12 for a lump-sum offer or 24 for a periodic payment offer.
The size of your debt is not in the formula, so there is no 10% rule. Two people with the same balance can get opposite answers.
What the IRS Data Book shows
2023 — Offers received: 30,163; Offers accepted: 12,711
2024 — Offers received: 33,591; Offers accepted: 7,199
2025 — Offers received: 38,797; Offers accepted: 5,464 (about 14%)
Source: IRS Data Book, Table 4-1. These are national figures, not a Southern California breakdown. Offers received rose while offers accepted fell, which is why checking the numbers before you file matters more than the filing itself.
Book a free 15-minute tax review if you want your reasonable collection potential worked out before you spend the application fee or a first payment.
Costs and time frames
IRS fee. $205 per offer, waived under the Low-Income Certification: household income at or below 250% of the federal poverty guidelines, $39,900 for one person and $14,200 more for each additional person (Form 656-B, revised April 2026).
Payment with the offer. 20% of the offer with a lump-sum offer, or the first monthly payment with a periodic offer.
Representation. A separate fee that varies by provider type and by how complicated the case is; the cost guide under Related reading compares them.
Time. The IRS says an investigation can take up to 24 months, and an offer not decided within 24 months is deemed accepted. Collection generally pauses while a processable offer is pending, and the collection statute is suspended during the review plus 30 days and during any appeal.
After acceptance. Five years of filing and paying on time.
How the process works, step by step
1. Pre-qualify — What happens: Run the free Pre-Qualifier. All required returns must be filed, and estimated payments and federal tax deposits must be current.; Form and time frame: Online; no open bankruptcy
2. Build the numbers — What happens: Work out your RCP and gather income, expense and asset records.; Form and time frame: Financial statement (Form 433-A)
3. File — What happens: Send the application with the $205 fee (unless waived) and 20% (lump sum) or the first monthly payment (periodic).; Form and time frame: Form 656, in the Form 656-B booklet
4. IRS review — What happens: An examiner verifies the numbers; collection generally pauses.; Form and time frame: Up to 24 months
5. Decision — What happens: Accepted, rejected or returned. A returned offer can be fixed and resubmitted.; Form and time frame: Appeal a rejection on Form 13711 within 30 days
6. Pay and comply — What happens: Lump sum: 5 or fewer payments within 5 months of acceptance. Periodic: 6 to 24 months.; Form and time frame: Then five years of filing and paying on time
7. FTB, if you owe it — What happens: A separate offer.; Form and time frame: Form 4905 PIT or BE; acknowledged in about 2 to 4 weeks, decided generally in 4 to 6 months
How to check whoever you hire
Credential. Enrolled Agents, CPAs and attorneys can represent you before the IRS. You can verify any Enrolled Agent's status with the IRS, through its public directory of credentialed preparers or its Office of Enrollment.
A flat fee in writing. It should be quoted after someone has looked at your IRS account transcripts, with no separate investigation fee.
Who handles your case. Ask who will personally work it, and whether that person holds the credential.
No promised outcome. The IRS decides from your numbers. Be wary of advertisements that promise to settle for a fraction of what you owe, and of any quote given before anyone has seen your transcripts.
How we work with Southern California clients
All State Tax Resolution is based in Los Angeles and prepares offers remotely for clients across Southern California (Los Angeles, Orange, San Diego, Riverside, San Bernardino and Ventura counties), by phone, video and a secure client portal. I am Sabih Shafi, the founder and an Enrolled Agent. An Enrolled Agent is licensed by the IRS under Treasury Circular 230 and can represent taxpayers before IRS Collections, Examination and Appeals in all 50 states. If the numbers do not support an offer, I say so and look at an installment agreement or Currently Not Collectible status instead. We also prepare FTB offers.
The first review is free. After we review your IRS and FTB account transcripts, you get a flat fee in writing, tied to the work (years, forms, agencies) and not to the size of your debt, with no separate investigation fee. Payment plans are available for the fee. Mailing address: 1110 N Virgil Ave, Los Angeles, CA 90029. Phone: (323) 900-0305.
Frequently Asked Questions
Where can I get Offer in Compromise help in Southern California?
You can use the free IRS Pre-Qualifier and file yourself, get free or low-cost help from a Low Income Taxpayer Clinic if your income is under the limit, or hire an Enrolled Agent, CPA or tax attorney. I am an Enrolled Agent in Los Angeles, and we prepare offers for Southern California clients by phone, video and portal. Whoever you pick, ask for the fee and the plan in writing.
Can I file an Offer in Compromise myself?
Yes. Anyone can file, starting with the free Pre-Qualifier, then Form 656 and a financial statement. The risk is the math rather than the form: if your offer is below your reasonable collection potential the IRS rejects it, and the $205 fee and first payment are not refunded but applied to your tax debt.
Do Los Angeles County and Orange County use the same IRS living-expense figures?
The national standard for food, clothing and other items is the same everywhere, but housing and utilities are set by county. Los Angeles County's are $3,525 a month for a family of two and $4,141 for a family of four. Orange, San Diego, Riverside, San Bernardino and Ventura counties have their own figures.
If I owe both the IRS and the FTB, do I need two offers?
Generally yes. The IRS uses Form 656, while the FTB uses Form 4905 PIT for individuals or 4905 BE for businesses, and the two programs run separately. The FTB may treat an IRS acceptance as supporting evidence but is not bound by it.
What happens if the IRS rejects my offer?
You have 30 days from the rejection letter to appeal on Form 13711. A returned offer cannot be appealed, but it can be fixed and resubmitted. Common reasons for rejection are an offer below reasonable collection potential, unfiled returns, estimated payments that are not current, and new balances accruing during review.
Last reviewed: October 2026 by Sabih Shafi, EA
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This article is general information, not individual tax advice. If you want to talk through your own IRS or state balance, book a free 15-minute review or call or text us directly.
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