Long story short, I hit a curb and steering wheel alignment was off (LEFT at about 20 degrees). My Left suspension arm was bent and guys at the auto shop told me that a replacement of the suspension arm and a wheel alignment will fix the problem.

After the replacement and alignment, steering wheel is now tilted to the RIGHT at about 5 degrees or so. They told me that it maybe because there's a chip in the steering rack, which they can't see cause it's internal, and that i would have to have it replaced if i wanted my steering wheel straight. This will cost me ~$850 which includes a 20% discount

Does this seem accurate? Can't they just remove the steering wheel and reposition it? How were they able to do the alignment if my steering wheel was not straight?

 

Assuming that bent parts have been replaced and the wheels are aligned properly, a steering wheel slightly off center when the car goes straight ahead is easily adjusted by turning both tie rod end adjusters the same amount in opposite directions. It doesn't have anything to do with the rack. Anyone who is even remotely competent at wheel alignment would know that. It sounds like they don't want to take the time to do it, even though you just paid them for a major repair.