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We bill hourly for legal representation.  While we can provide a general estimate of costs based on similar cases we’ve worked on in the past, each case is different and could require more or less work.  Our minimum retainer amount is $5,000.  This amount represents our good faith estimate of the amount of time it will take us to open your case, review your documents, and make an initial contact with the tax agency.  Once the retainer is used up, we may request an additional retainer based on our fee estimates for the next stage of planned work.  Or, we will send monthly invoices with details of fees incurred during the previous month.

While we strive for efficiency and quick resolutions, it has been our experience that a “fast” resolution is not always the “best” resolution.  Government agencies operate on their own timeline and it’s not uncommon for routine audits or collections representations to last one year or longer.  Time generally favors the taxpayer so, while we always keep your case fresh and top of mind, we try to work cooperatively with tax agents at the pace that will result in the best outcome for our clients.  Getting the right outcome that results in the lowest amount of tax is our usual objective!

The most important step is to file your tax return – this prevents late filing penalties and starts the clock ticking for IRS to assess additional tax and collect the reported tax.  The next step is to ensure you have sufficient payroll withholdings or are keeping up with estimated taxes.  Finally, watch your mail – IRS will send notices when you have a balance due and these notices contain important information on payment options, collection alternatives, and deadlines.

IRS has the discretion to accept a smaller payment in lieu of the full tax balance owed.  The process for requesting a settlement is called Offer in Compromise, or OIC.  As part of the OIC process, a taxpayer will propose a settlement amount and explain why it is in the best interest of the IRS to accept the settlement.  Taxpayers are also required to complete a financial information statement that fully discloses their financial situation.  IRS will evaluate the proposed settlement and will investigate the amount it expects to collection during the ten-year collection statute based on the financial disclosure.  If the proposed settlement matches or exceeds the IRS’ computation on its “reasonable collection potential”, they will most likely accept the settlement offer.  

IRS also has discretion to abate or reduce penalties.  Taxpayers may request abatement by submitting a written request with a statement explaining why they believe the penalty should be abated.  If the statement satisfies the IRS reviewer’s sense of “reasonable cause” or if the taxpayer has a history of filing compliance and timely tax payments, it is possible IRS will abate the penalties. 

While the above scenarios are possible, it can be very challenging for a taxpayer to succeed with either request.  IRS is a very efficient creditor with significant power to seize assets to satisfy a tax liability