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What are Tax Attorney fees?

Oftentimes, when people call our office to schedule a consultation, they ask our intake staff what their fee will be. We tell our staff to never say something like “During your consultation, your attorney will give a fee quote. And if you feel that you won’t get enough value for that fee, you are free to decline representation with no hurt feelings.” But that really doesn’t tell you a lot, does it? So in this article, I’ll mention some of the guidelines to give you an idea of what tax lawyer fees are.

Flat Tax Lawyer Fees

First, not every tax lawyer firm will quote you a flat fee. Many of my peers in tax law prefer to charge an hourly rate. Hourly rates for tax lawyers range from a low of $180.00 to some who charge as much as $950.00 an hour (UPDATE 9.21.2013: We’ve now seen $1050 per hour). Regardless of how much a tax attorney fee is, most reputable attorneys will refuse to undertake the work if the total fee will outstrip any value.

 

Tax Resolution Attorney Fees

Our tax firm is strictly a tax resolution law firm specializing in tax negotiations, tax audits, administrative appeals and offshore disclosures (we are not a tax planning or tax avoidance law firm) And from our own experience though, the hourly structure does not work. Why? Because intentionally or not, the attorney will look to maximize the time spent on a particular case. And on the other hand, intentionally or not, the client will work to minimize time spent on a case. So the problem is that no one is focusing on the very real problem: The IRS!

I asked one of my friends who charges an hourly rate what percentage of clients who see him hire him. And he told me pretty much 95%. I then asked him how many cases he closed to successful resolution. “Not good,” he replied. The reason is that client communication fall apart, because clients want to avoid making work for the attorney because they are not willing, or were they expecting to have to pay that much for it.

Contact us now to for a no-obligation tax attorney fee quote

I know because a few of his ex-clients hire us. They complain that he is not a good attorney (actually he is brilliant). The problem is that the hourly fee rate makes the him and his client adversaries. He is not on the same page as his client.

Compare that with the flat fee model. We do enough of tax resolution cases to know what we need to charge to meet our costs and make our desired profit. The client may not like our price, but they have the option to decline representation and seek an second opinion elsewhere. With no obligation. We’ve had many people we saw us years previous, declined representation, who later hired us because they found out while our fee seemed steep initially, it was nothing compared to the damage the hourly fee can cause, and nothing compared to not getting the case solved as quick as possible.

The whole point is you hire an attorney to help you with a tax problem, not to get into another problem owing someone else money, right?

 

Tax Lawyer Fee Factors

Anyway, let’s talk about some factors that will help you avoid the highest tax lawyer fees. 

 

  • Be wary of those national tax “resolution” firms. They claim to be attorneys, but if you can’t find an actual tax attorney listed anywhere on their website, they may be lying to you. Because of their likely incompetence (how do  you think they could afford that big marketing budget?) they are unable to solve your case, they will make it worse, and you will need real attorney help. If we are able to get to a case before anyone else does, that will lower your fee. And don’t just rely on a BBB ranking. check to see when the ranking started. The default rating is an A.
  • Get to us quick. For example, if you are not levied we are not under the same time constraints when dealing with the IRS. Also, if you are audited, hire us first instead of trying to handle it with ineffective assistance. We will have to charge you more to appeal the damage you or your previous help caused, and our legal options may be limited.
  • Be as organized as you can. If you have you affairs in decent order, then that shows us that you are very committed to resolution. We know we will have a great relationship. We know this is not possible for everyone, so if you are a bit disorganized, we have proven systems to help you get things under control.
    Have realistic goals. If you demand a particular resolution, then we won’t even offer you a legal fee — We won’t take your case.
  • Complexity of the case. This is one of the biggest drivers of cost. As you can imagine, for handling some of the toughest tax problems around the world to the more common fact-patterns, there is a huge range in our legal fees. The more years, the more issues, the larger (potential) tax bill (or criminal liability), the more notorious the facts, these will all determine what you fee will be. Getting to us quick, before someone mucks up the case, will help keep complexity to a minimum

 

 

Show me the value.

Ultimately, your tax lawyer fee must deliver value. If it won’t, you should know that before hand, shouldn’t you?

 

 

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75 Comments
  1. Excellent article. I have a T&E and asset protection practice and have been charging flat fees for our transactions work since the early ’90s. I recently disovered ROn Baker and his body of work and was pleased to know there are many of us Flat Fee lawyers out there with which to converse and from which exchange ideas and issues.

    The measure of the “value” to the client is very subjective and always the biggest challenge for us because the client doent know what they dont know. IF we quote prospetive cleint $100,000 to put their estate and asset protection plan together and they dont have any creditor issues, for some clients, its hard to get thier arms around such a substantial fee. However, if they ever are called upon to use the structure, our fees are far less than thier defense counsel will charge to defend the lawsuit without any incentives for the plaintiff to settle.

    I look forward to reading yours and other practitioners comments about how to best convey the value pricing propostion when the value won’t be realized until sometime in the future.

    Vexing…

  2. Thanks for the feedback, Jeff. One of the biggest benefits is a happy staff. They know their focus is to get the quickest tax relief for a client, not rack up an many hours as possible.

    We never have conversations that start with “that resolution took you too little time…”

    One of my employees came fro ma firm that charged hourly…she said all of the cases wound up costing around $20,000.00. Miraculous. And she would have to bear the brunt of the clients’ ire.

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