Though it is perfectly acceptable to represent yourself in an audit or U.S. Tax Court, the reality is that the odds are not on your side. One could even argue that the IRS prefers to have taxpayers represent themselves so they can bully and intimate them. Fortunately, there are tax attorneys and other professionals that will gladly represent your case against the IRS.
You may wonder, how much does it cost to hire a tax attorney? While there is no set fee, this article will tell you what you can approximately expect to pay for tax services and will also help you determine whether you should proceed with legal representation.
Hiring a Tax Attorney vs. Negotiating With the IRS Yourself
There are pros and cons to each situation. While you can represent yourself, it may serve you best to hire a professional with experience in tax law. Tax attorneys are experts in the field for a reason and present the highest likelihood you’ll receive favorable results.
However, tax representation is not always cheap. Tax attorneys generally charge a fee (hourly vs. flat rates), as well as set charges for the type of tax representation. For example, getting representation for penalty abatement is traditionally much cheaper than getting assistance for an Offer in Compromise (OIC).
To get an accurate estimate, you will want to meet with a tax attorney to get their pay structure and fees. Every tax attorney is a little different, but any respectable tax pro will meet with you for the first time free of charge and with no obligations. This is so you can receive some consultation on what they can do for you and see if the attorney is the right fit.
Types of Tax Attorney Fees
Tax attorneys usually get paid in one of two ways:
- Hourly Rate: The majority of tax attorneys charge by the hour. Every tax attorney has a different rate, but expect it to range from $200 to $400 per hour. Some of the most respected and experienced attorneys may set hourly rates at $1,000 per hour or more.
- Flat Fees: Some taxpayers may have the opportunity to negotiate a flat fee for legal representation against the IRS. Tax attorneys will generally only go for this option if the matter is routine and can (in their estimate) get settled quickly. The flat fee is agreed upon before the attorney moves forward and will not change regardless of how much time the lawyer spends on the case.
There are pros and cons to hiring a tax attorney by the hour or for a flat fee. In hourly cases, one hopes the issue gets resolved quickly in order to avoid more legal fees.
If you are concerned with how you can afford a tax attorney, ask the firm about payment options. There are several that feature payment plans and other ways to make hiring an attorney more affordable.
Anticipated Tax Attorney Costs Based on Type of IRS Issue
There are many reasons why one would seek the services of a tax pro to resolve a dispute with the IRS. Here are some of the most common types of issues and what you can approximately expect to pay a tax attorney for each of them:
- Installment Agreement: $750-$1,500
- Penalty Abatement: $1,000-$2,500
- IRS Audit (Simple): $1,000-$3,500
- Offer in Compromise: $3,500-$6,500
- IRS Audit (Complex): $5,000+
- IRS Appeals: $5,000-$7,500
- U.S. Tax Court Litigation: $10,000+
Once again, these figures are not facts. Each case is different, so you could end up spending far more or far less depending on the situation. At the end of the day, the cost of resolving a tax dispute depends on the nature of the case.
Self-Representation vs. IRS
You may feel perfectly comfortable representing yourself in handling an installment agreement or a simpler type of audit. However, in more complex cases, you may not have much of an option except to seek legal representation—especially if your case goes to the U.S. Tax Court.
Though the average cost of a tax attorney may seem intimidating at first, try not to let it deter you. Often, winning a case against the IRS can only be achieved by hiring a seasoned, skilled, and accessible tax attorney.
Tax Help From Levy & Associates
Levy & Associates can provide legal assistance for OICs, audits, levies, liens, wage garnishments, unpaid taxes, and other tax settlements. We have successfully represented taxpayers for over two decades in a variety of different scenarios.
Contact us today for an initial free consultation. We are available at 800-TAX-LEVY or www.levytaxhelp.com.