I had to amend some unreported foreign income(around 2.5K) for two years, file some FBAR forms and had some PFIC(Passive Foreign Investment Company) investments. Not wishing to do it all by myself, I retained a tax attorney from Washington because his rate was 200/hour unlike other tax attorneys who are in the range 400-750 per hour. He agreed to a flat rate for helping me, but later on I found out that he was tracking time(spent for me) and refused to help me, when I needed it most, since he felt he had spent 5 hours on me. We signed a engagement letter and I paid his fee(1000) in full at the start.
1. How can I ensure if I retain another attorney, this won't occur?
2. Am I allowed to retain another attorney, since most won't take cases for which some work is done by others?
3. How difficult would it be for a layman to communicate with revenue service to get penalties waived? Since I did the taxes myself, I know what is in my return, but I have not dealt with them revenue service agents before. I heard from a para-legal(who used to work for a tax attorney) that some attorneys care only about their billable hours and not at all about their clients. She told me this is common and they take more cases than they can handle, then drop them like what was done to me. The engagement letter stated things he was going to help me with, but since he felt that he had already spent time(5 hours) on me, he refused. As a layman, now I have to do all the returns and send them not knowing if they were done correctly. Surprisingly, he offered help(for a fee and said will keep his charges low) for communicating with revenue service for me.
I basically agree with the other attorneys' responses, but can add:
1 -- Any time one hires a service professional there are risks (doctors, lawyers, accountants, or others) that one will be disappointed. One can try and minimize the risk by doing research on the potential provider, by clearly defining the services and cost in the service agreement, and by spending enough in an appropriate way based on the research to hire the best one can afford.
2 -- You most certainly can hire another attorney. You have the right to chose your own counsel.
3 -- You can handle the matter yourself, but there is a risk that you will not know your options, make procedural missteps, and pay more than you otherwise would have had to pay if you had only had good professional help.
However, the dollars at issue may not be worth spending an equal amount for an attorney, and you can certainly try to handle the matter yourself first to see what develops. Go to IRS.GOV and do some research on penalty relief (i.e., form 843), and other issues like FBAR, and try to evaluate your best options for going forward.
If you want to talk directly, you are welcome to give me a call. I handle a lot of tax controversy issues and I am based in SLC.
This answer or response should not be considered legal advice, and does not create an attorney-client relationship. If you have further questions, I would be glad to discuss your situation further. I can be reached at US - (801) 746-6300, or online at -- http://www.lewishansen.com/attorneys/robinson.html
"Cheap is dear!" is a phrase my late grandmother always used to say. I do not know the rates for experienced tax attorneys in Salt Lake City, but in New Jersey the rates are $400 to $800 per hour. By trying to get a cheap, fixed rate, you made yourself unattractive and unprofitable to your counsel. I know this is not politically correct, but it is true.
IMMEDIATELY get a good tax attorney to handle this matter for you. This is not an area that you can handle yourself!
I know this is not what you want to hear, but I hope it helps!
I would inquire into the reputation, expertise, and knowledge of the tax attorney. Flat rates should not be risky. A tax attorney should be able to assess how much time a client's project will require and provide a rate accordingly. I do flat rate work all the time, because after helping many clients I understand the amount of work likely required.
Andrew B. Gordon , Esq., CPA
Gordon Law Group, Ltd.
847.580.1279 | ABG@GordonLawLtd.com
Andrew B Gordon is a CPA and attorney licensed to practice law in Illinois. The information provided here is for educational purposes only and is not intended as legal advice for a particular matter. This response does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult an attorney.