If you are having problems with the IRS, you should consider hiring a tax attorney. Tax attorneys offer a variety of services to help people deal with tax issues. A qualified tax attorney can ease communication between you and the IRS and can even handle complex tax litigation if necessary.
If you suspect that you may need the services of a tax attorney, it is wise to do some research to find answers to common questions. For instance, how will you find a reputable tax attorney? What tax issues can a tax attorney resolve for you? What do you need to do to actually hire a tax attorney? How much will a tax attorney charge for handling your case? All these are great questions, and this guide will help you find the answers you need.
What Are Some Common Reasons to Hire a Tax Attorney?
When dealing with the IRS, you can represent yourself. This may be problematic. Just because self-representation is possible does not mean it is a good idea. You may come out better by hiring a well-qualified attorney who will act in your best interests.
For certain situations, the advice of a tax attorney is particularly helpful. Here are some common reasons to hire an attorney:
- You are being audited.
- You need to negotiate a settlement with the IRS.
- You receive a notice from the IRS about a tax issue that you do not understand.
- You find out that the IRS intends to pursue criminal charges against you.
- You feel uncomfortable dealing with a tax issue on your own.
What Types of Issues Can a Tax Attorney Handle for You?
The basic purpose of hiring a tax attorney is to resolve any issues you have with the IRS in the best way possible. Here are some potential problems you may have and an explanation of how a tax attorney can help resolve them.
The term “audit” can strike fear into the hearts of taxpayers. If you receive an audit notice from the IRS, you must read it carefully. Determine what type of audit it is and what documentation you will need to provide.
For a correspondence audit, you may not need an attorney. If you are not sure whether you need one or not, it may be best to err on the side of caution. Let an attorney look over your audit materials. If the IRS requires an office audit, a field audit, or a Taxpayer Compliance Measurement Program (TCMP) audit, hiring a tax attorney is a good idea.
A tax attorney can handle all communications and correspondence with the IRS on your behalf. If your audit will be face-to-face, you have the right to hire a tax attorney to represent you during the audit. The attorney can also help negotiate a settlement if necessary.
Sometimes just having a tax attorney with you makes it easier for you to handle the stress of an audit. Tax attorneys handle audits and negotiations with the IRS all the time. So, the negotiation process is not stressful to them. Generally, a tax attorney is able to get the best settlement possible for you. Having an attorney may help you avoid agreeing to something that is not in your best interest.
2) Settlement of Tax Debts
The IRS Fresh Start Program offers alternative payment and settlement options for taxpayers who are unable to pay their tax debt on time. One of the possible alternatives is an offer in compromise. An offer in compromise enables you to settle your tax debt for less than the full amount you owe. The IRS does not accept an offer in compromise unless they believe it to be unlikely that you will be able to pay your tax debt in full.
A tax attorney can help you determine if you will qualify for an offer in compromise. Then, the attorney can craft the offer and present it to the IRS on your behalf. A good tax attorney is familiar with this process, which means that he or she may have a better chance of persuading the IRS to accept your offer than you may have on your own.
If the IRS does not accept your offer in compromise, a tax attorney can help you negotiate an alternative settlement. For some cases, an attorney may be able to negotiate for a lesser amount. Even if you have to pay the full amount, he or she can negotiate more generous repayment terms. This helps you settle your debt without creating undue financial hardship. It may also help you avoid certain penalties and fees.
3) Interpretation of IRS Notices
If you receive a notice from the IRS that you do not understand, a tax attorney can explain the meaning and intent of the notice. A tax attorney may be able to handle an IRS notice quickly and easily. Working with an attorney can eliminate stress for you and ensure that you are in compliance with all IRS requirements.
4) Handling of Criminal Charges
If the IRS is pursuing criminal charges against you for tax fraud or tax evasion, you need the services of a tax attorney. These types of criminal charges carry serious penalties. They can even lead to your incarceration. In 2015, the IRS prosecuted 3,853 taxpayers and 81% of them received prison sentences.
A tax attorney can help you protect your rights under the law. Tax attorneys qualified to represent you in federal court can litigate on your behalf and can frame your legal arguments in a positive light.
How Can You Find a Reputable Tax Attorney?
Once you decide that you need to hire a tax attorney, you may have concerns about how to find a reputable one. Here are some tips for finding a tax attorney with a good reputation and track record:
- Ask family or friends for referrals. If someone you know has good success with a tax attorney, there is a good chance that you will also have good results.
- Ask professionals in related fields like CPAs or tax preparers for a referral.
- Confirm that the tax attorney you choose has the proper credentials and license to practice in your state.
- Look for tax attorneys who work with tax relief firms that have a license by the IRS to train tax professionals.
- Find an attorney that in specializes in tax law.
A reputable tax attorney should be able to tell you specific actions he or she can take to resolve your tax issues. The attorney should also be able to tell you what actions you will need to take. It’s a good idea to ask your attorney if he or she has experience in cases like yours. You can also ask what outcomes he or she expects for your case.
How Much Will a Tax Attorney Charge to Handle Your Case?
There are no hard and fast rules for how much a tax attorney will charge to handle your case. Each tax case is different and some require more work than others. Complex cases will incur more costs than simple cases. Lawyers with great expertise may charge more for their services than lawyers just starting out in business.
Some tax attorneys charge a flat fee, which is a single flat cost for a particular service. The advantage of a flat fee is that you will know upfront how much your bill will be. The potential disadvantage of a flat fee is that some attorneys set that fee at the upper end of the rate scale. This happens when attorneys base fees on the maximum number of hours they believe it will take to resolve your problem.
The most common type of billing for a tax attorney is an hourly rate. This rate can vary according to the experience and expertise of your attorney. Your geographical location may also affect how much your attorney charges per hour.
Some tax attorneys charge a fee of $100 to $500 for an initial consultation, depending on the time they spend with you. Other attorneys may offer an initial consultation free of charge. You can find out whether your consultation will be free when you schedule your appointment.
These firms provide the advantages of hiring a tax attorney without the upfront fees. You don’t pay anything until they settle an account. This gives you the benefit of having a tax attorney look over your case without the expensive consultation and retainer fees.
How Do You Know if Your Attorney is Charging You Correctly?
While there are no fee structures set in stone, costs for resolving common tax problems typically fall within a certain range. For instance, most tax attorneys bill $200 to $400 per hour. Then, the complexity of your case may help determine the rates.
As an example of the varying rates you may pay, consider the following estimates. For negotiating minor settlements with the IRS, you may pay $700 to $1,500. For simple cases that require only a moderate amount of legal representation, you may pay $2,000 to $4,000. If your tax issue involves a lengthy court case, you may pay $5,000 to $15,000. These figures are not definitive but they may help you understand some of the typical fees tax attorneys may charge.
The best way to find out what your costs will be is to discuss the matter openly with your tax attorney. His or her experience with similar cases will make it possible for them to give you a ballpark figure for the cost of handling your case. Even so, complications can result in adjustments to the fees.
Tax relief companies charge similar fees to tax attorneys. The big difference is that tax relief companies don’t charge upfront fees. You only pay for performed work.
Getting Help When You Need It
When you experience tax trouble, a reputable tax attorney or a tax relief company that employs tax lawyers can help you handle communication and negotiation with the IRS. Want some help to deal with the IRS but not sure you can afford the fees? Click here for a free consultation with a tax relief expert. There are no strings attached and it won’t cost you anything to find out whether you qualify for a tax relief program.