Tax Controversy and Arizona Attorney Fees
A man calls an attorney and asks her how much she would charge to answer three quick questions. The attorney replies, "one thousand dollars." "A thousand dollars!" cries the man. "That's very expensive isn't it?" "It certainly is," replies the attorney. "Now, what is your third question?"
This is one of my favorite lawyer jokes. It is funny because there is truth in humor. Most attorneys I know however are not trying to get something for nothing, as is this attorney They know their practice area, and their knowledge and experience can be worth their weight in gold to those with serious problems.
The problem is that in between it's "weight in gold" and zero, it is hard to determine what a taxpayer should pay a tax attorney.
Generally, the fees charged are set by the market. Sometimes the market is skewed a bit by the high pressure sales skills of the tax resolution company employee. When promises are made that aren't necessarily true, apples can't be compared to apples.
In our office, we feel that the best way to bill a client for tax related work is by the hour.
The hourly rate solves a number of problems related to the determination of what should be paid.
1. The rate can be compared to other attorneys with similar experience and knowledge.
2. The hourly rate provides the attorney an increased incentive to work personally on the case instead of handing the file off to staff and turning the office into a "mill" as "flat" fees often do.
3. The hourly rate provides the taxpayer client an incentive to fully participate and cooperate with the Attorney. This results in a more educated client, and a better outcome.
4. Hourly rates do not end up costing the client more necessarily than flat fees. They are often less in reality and less when the results are considered. Would a client pay $500.00 more in fee, if it resulted in $10,000.00 in additional savings?
5. Hourly rates provide the client more control over what is being accomplished.
6. Hourly rates provide the client more opportunity to participate and thereby be active in the reduction of the fee.
In our office the fee structure is set up as follows:
1. Telephone Discussion - 5- 15 minutes - Free
2. In office Consultation - 45 minutes - Free
3. Strategy Meeting - 2.5 hours - $325.00
All other matters including tax history analysis, financial analysis, bankruptcy discharge analysis, appeals, litigation, offer in compromise, installment agreement, non collectible status, bankruptcy etc. are billed at the following rates.
Attorney - $225.00 per hour
Paralegal - $125.00 per hour
Secretary - $60.00 per hour
The typical retainer varies between $850.00 and $3500.00 depending on the situation. The retainer is placed in the Arizona State Bar's trust account and only removed to pay the law office when the time is billed. The non billed or non earned portion remains in the trust account and belongs to the client.
A range of costs for common types of representation are often requested and are provided here:
Consumer Offers In Compromise without appeal - $2500.00 to $4500.00
Business Related Offers In Compromise without appeal - $3500.00 to $6500.00
Installment Agreement Negotiation - $500.00 to $2500.00
Consumer Tax Motivated Bankruptcy Chapter 7 - $1800.00 to $4000.00
Tax History and Personal Financial Analysis and Planning - $850 to $2500
If you have questions about legal fees, flat fees vs hourly rates etc. feel free to call me, Arizona Tax Attorney Michael Anderson at 480-507-5985.
