It is really difficult to determine how much it will cost to get done what needs to get done to resolve a case as there are so many factors that impact a case, a lot of which are out of our control. Some factors are the complexity of the case, the amount of the liability, the age of the liability, the type of tax involved, where in the process the case is, whether the matter involves multiple taxing authorities and jurisdictions, the type of case, who the case is assigned to at the taxing authority, etc. Because of all these factors and the potential for new information or issues to spring up in the middle of the case, it is impossible to put a set dollar amount on the cost of resolution, although we usually can give a range or estimate.
We charge based on an hourly rate. There are different rates for attorneys and other staff. To keep costs down, we often have paralegals, Enrolled Agents and our CPA work on the parts of the case that they can work on. We are careful to make sure the “juice is worth the squeeze” and that our efforts will have tax saving impact for our clients.
Be wary of representatives that charge a flat fee as they are almost always getting the better end of the bargain. While some clients like flat fees since they will know exactly how much the service will cost, a certain margin of risk is usually built in so most flat fee clients overpay for services. Also, if it is flat fee per resolution, the resolution company is going to try and get the simplest resolution for them to get, not the best resolution for the taxpayer, and if more issues pop up, it will be additional fees.
A client’s options are going to depend on multiple different factors but also depend on a client’s goals. Some goals or priorities are going to be competing. It is always the client’s duty to decide whether to accept any settlement proposal, regardless of the type of case. Our team is here to negotiate and navigate the process, and to advise the client of whether a settlement is recommended, but ultimately, settlement authority belongs to the client.
We charge hourly because we want to make sure clients have the proper representation to deal with whatever happens in the midst of the case. We want to ensure that the matter is resolved. We just want the case to cost what it will cost, without overcharging a client by building in a flat fee buffer and providing subpar service.