A friend of mine had a new house built a few years ago. We always seem to be in the midst of some kind of remodeling project, so I had asked him about his selection of appliances, cabinets, carpet, fixtures and windows. I was a bit surprised by his response. He said he was not going to have finishes put on his house prior to moving in, as he was going to do it himself over time. That was several years ago. His house is still not finished and the work that has been done does not look safe.
Many taxpayers are inclined to “go it alone” with their IRS tax problems. This is usually because they think they cannot afford a tax attorney. Like my friend and his unfinished house, the reality is that they cannot afford not to hire a tax attorney. There are no “do overs” when it comes to handling IRS tax problems. You cannot take back that statement to the IRS auditor, you cannot go back and marshal the evidence to present to the agent after the audit closes, and you cannot go back and make a more persuasive argument to the IRS appeals officer. You cannot go back and contest the IRS’s decisions after the time for doing so has passed. These “foot faults” can significantly increase the amount of tax that you end up having to pay. They can also make the IRS collection process much more difficult.
The cost of hiring a tax attorney may be more reasonable than you think. While there are some attorneys who work as general practitioners, most attorneys do not dabble in tax work. Tax is a specialty. Tax attorneys usually only do tax work. This translates into savings, which can be passed on to you.Because the tax attorney does not have to keep abreast of every area of law, he does not incur the costs to develop and maintain this broad knowledge base.
The tax attorney has probably worked several cases just like yours. There are instances where he may not even have to do any legal research to resolve your case. So you may not have to pay for any research time. There are other savings presented by this type of specialization. Marketing costs are an example. Specializing in one area of law usually means that clients are able to search for and find the attorney. They do not have to rely on the attorney to market their practice to attract the right clients. This is particularly true for tax attorneys. As a result, tax attorneys do not face the pressure to pass on their legal marketing costs to you in the form of higher hourly rates.
Almost all tax matters can also be handled remotely. This means that you do not have to pay the exorbitant going rates to hire a tax attorney in New York or San Francisco. You can hire a tax attorney in Houston, for example, at a much more reasonable rate.
It should also be noted that there has been a trend for attorneys to un-bundle their services. This means that the attorney provides some services but not others. In many cases it means that the attorney will work with others who are responsible for more routine aspects of the work, but who have lower hourly rates. This trend is alive and well in the tax space. Tax attorneys often work with paralegals and others to gather facts in cases and work with accountants to prepare and report tax positions. They may even have these individuals serve as point person in working with and interacting with clients. This can result in significant savings.
Legal advice can be expensive, but it is probably not as expensive as you may be thinking. If you have a tax problem and are tempted to “go it alone,” you should check with a tax attorney to see exactly what the costs might be. Most tax attorneys provide a free initial consultation and even provide an estimate of the time and cost for their services.
We can help. We help taxpayers with IRS issues daily. If you have IRS tax problems, we would like to hear from you. Please contact us today to schedule an appointment to see how we can help.