Offer in Compromise — San Diego
San Diego Offer in Compromise Attorney
Key Takeaway
How the IRS Actually Evaluates an Offer
An Offer in Compromise is a settlement with the IRS for less than you owe — and acceptance turns on one number: your Reasonable Collection Potential. The IRS calculates RCP from Form 433-A (OIC) or 433-B (OIC): the net realizable equity in your assets plus your future income over 12 or 24 months, measured against the IRS Collection Financial Standards rather than your actual spending. If your offer is at or above RCP, the IRS is supposed to accept it. If it is below RCP, the offer gets rejected no matter how sympathetic the story is.
The mechanics matter. A lump-sum offer requires a 20% deposit with Form 656, and that deposit is not refundable if the offer is rejected. Under IRC § 7122(f), an offer the IRS fails to act on within two years is deemed accepted — which almost never happens, but it tells you how long the process can run. Most offers take six to twelve months to work through the centralized offer units.
Is an OIC Actually the Right Tool?
The short answer is: not always. An offer is one of several ways to resolve a balance you cannot pay. A partial-pay installment agreement can cost less over the life of the debt. Currently-not-collectible status stops enforcement while the Collection Statute Expiration Date keeps running. And where the CSED is close, waiting can beat settling. A rejected offer, meanwhile, extends the collection statute while it is pending. We run the RCP analysis honestly before filing anything — because filing an offer that should never have been filed costs you money and time you do not get back.
California Has Its Own Offer Program
The FTB, CDTFA, and EDD each run separate offer in compromise programs with their own criteria. A federal OIC does not resolve a California balance. For San Diego clients we routinely evaluate both sides — and the state agencies weigh factors differently, including future earning capacity. If you have balances with the IRS and the FTB, the sequencing of the two offers is a strategic decision.
Local Context: Where San Diego Tax Matters Actually Happen
Federal tax matters in San Diego are handled out of the IRS San Diego field office at 880 Front Street, Suite 2226, San Diego, CA 92101. Our office is in Del Mar Heights (12636 High Bluff Drive, Suite 300), about 20 minutes north on the I-5. The downtown federal complex houses the IRS, the U.S. Attorney’s Office for the Southern District of California, and the Edward J. Schwartz United States Courthouse at 221 W. Broadway — where federal tax litigation affecting San Diego residents is heard when it reaches district court. The U.S. Tax Court does not keep a permanent San Diego courtroom; it sends judges here for trial sessions two to three times a year. On the state side, the FTB works San Diego cases out of 7575 Metropolitan Drive, the CDTFA out of Rancho Bernardo, and the EDD out of 4641 Frazee Road.
About Sam Brotman
I am the managing attorney at Brotman Law. I hold a J.D. from the University of San Diego School of Law, an LL.M. in Taxation, and an MBA. I am a member of the California State Bar (Bar No. 274966) and admitted to practice before the U.S. Tax Court. I have been named a Super Lawyer every year since 2016. Collections defense — offers in compromise, installment agreements, levy releases, and CSED strategy — is a core practice area, on both the IRS and California sides.
Talk with a Tax Attorney
If you are weighing an Offer in Compromise, we can run the Reasonable Collection Potential analysis and tell you whether an offer, an installment agreement, or the collection statute is your best path. Free 15-minute call.
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Frequently Asked Questions
How much should I offer the IRS?
Your offer amount is driven by Reasonable Collection Potential: the net equity in your assets plus 12 or 24 months of future income under the IRS Collection Financial Standards. Offering less than RCP invites rejection; offering more than RCP is leaving money on the table. The analysis on Forms 433-A (OIC) or 433-B (OIC) is where offers are won or lost.
How long does an Offer in Compromise take?
Most offers take six to twelve months from filing to decision, and complex offers can take longer. Under IRC § 7122(f), an offer not acted on within two years is deemed accepted. While an offer is pending, IRS levies generally stop, but the collection statute is extended.
What happens if my offer is rejected?
You have 30 days to appeal a rejection to the IRS Independent Office of Appeals using Form 13711. Many rejected offers are salvageable on appeal, especially where the dispute is over asset valuation or the treatment of specific expenses. If the offer fails entirely, an installment agreement or currently-not-collectible status remains available.
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Run the OIC numbers before you file.
If you are weighing an Offer in Compromise, we can run the Reasonable Collection Potential analysis and tell you whether an offer, an installment agreement, or the collection statute is your best path. Free 15-minute call.