The value of a tax lawyer is almost immeasurable. Taxes are a part of almost every activity in everyday life, businesses, and every individual’s yearly requirement to pay income taxes.

The cost of a tax lawyer, also called a tax attorney or debt lawyer, will vary depending on the client, their needs, and the location. There are three different general types of fee schedules that lawyers often use. They include: 

  • Hourly rates; 
  • Contingency fees; and 
  • Flat fee.

An hourly rate is a common way to bill for many types of cases, including tax cases. The average hourly cost for the services of a lawyer ranges from $100 to $400 per hour.

It is important to note that some attorneys charge well above this average, up to as much as $1,000 per hour. Due to these variances, it is very important for an individual to discuss what the lawyer’s hourly fee will be up front.

In certain types of cases, if a lawyer charges by the hour, they also charge a retainer fee. A retainer fee is a fee that is paid at the beginning of the case which is based on the attorney’s hourly rate.

The retainer fee can be compared to a down payment. Fees and costs of the case are deducted from that amount until it is used up. A retainer fee is usually non-refundable.

A second type of fee is the contingency fee. With this type of fee, the lawyer will be paid a percentage of the damages award at the end of the case, if they win the case. In this billing arrangement, the lawyer does not charge an hourly fee.

The percentage that the lawyer will collect as payment varies depending on the location and the details of the fee arrangement. Contingency fees may range from 5% to 50% of the award. 

With a contingency fee, the lawyer does not collect any payment for their work unless they win the case. In other words, their income is contingent on their success.

It is important to note that, with contingency fees, even though the attorney does not receive payment until the case is won, their client may still be responsible for up-front fees reltaed to the case. These may include:

  • Court filing fees;
  • Discovery costs;
  • Expert witness fees; and
  • Other overhead fees required to complete the case.

The third type of fee arrangement that may be used is a flat fee. If the case is simple, the lawyer may charge one fee to complete their work on the case. Cases in which a flat fee is commonly used includes:

  • A simple wills;
  • An uncontested divorces;
  • A power of attorney; and
  • Some minor criminal cases.

In most cases, a tax attorney will charge an hourly rate or a flat fee for their services. For example, if an individual needs assistance with a simple tax issue, a flat fee may be used.

What are Some Factors Used in Setting Tax Lawyer Fees?

As noted above, the fee a tax lawyer charges depends on several factors. An experienced attorney in a large city will charge a higher fee than a newer lawyer in a small town.

There are also other factors which determine the lawyer’s fee. These include:

  • The type of representation that is required; 
  • The services that the attorney will perform; and
  • The fee arrangement that is used.

The type of representation that is required by the case is a large component of the cost. The cost rises as the complexity of the case rises. 

This rule also applies in cases where there is an aggravating factor or circumstance. Additionally, the cost will rise as the number of services the attorney is providing rises. 

The fee arrangement that is used is also a major component in the cost. Overall, the cost varies depending on whether the lawyer:

  • Bills on a contingency fee plus an hourly basis;
  • Charges a flat fee; or
  • Is retained and provides advice on an as-needed basis.

Factors that may be considered when determining a lawyer’s fee include:

  • The amount of time and the effort the lawyer must put into the case;
  • How difficult the case is predicted to be;
  • The skills required to perform the legal services;
  • Fees which are normally charged in the same area for similar legal services by lawyers with similar skills, reputation and experience;
  • How large the damage request is in the lawsuit, which is a factor if an individual has agreed to a contingency fee; and
  • If the billing rate is fixed or contingent.

What Services Do Tax Attorneys Typically Provide?

Tax attorneys provide a wide range of services in several different legal categories. These may include:

Taxes are involved in almost everything an individual does, from working to purchasing a home. A tax attorney will be familiar with the most recent revisions to the Federal Tax Code as well as other relevant tax laws and will be able to assist with many different issues, from corporate taxes to tax evasion lawsuits.

In many cases, tax lawyers are hired to advise a business, an individual, or a government agency regarding tax requirements. This helps to ensure they are in compliance with any applicable tax laws.

Some tax attorneys may specialize in certain areas, such as an income tax attorney. This type of attorney specializes in filing income taxes for businesses and individuals. 

A tax lawyer can also advise individuals regarding complicated tax issues. Tax lawyers are also equipped to handle a dispute before the Internal Revenue Service (IRS) and a state taxing agency.

If an individual has any tax related questions, it is essential to contact a tax attorney as soon as possible. Errors and miscalculations on taxes can have serious consequences. 

It is important to contact a tax attorney immediately upon receiving any notices from the IRS. These notices often contain explanations of issues and deadlines that must be met in order to avoid consequences. 

A tax attorney will protect a tax payer’s due process rights. An attorney may also be able to negotiate a settlement with the IRS.

Are There Any Advantages to Hiring a Tax Lawyer?

There are many advantages to hiring a tax lawyer. A tax lawyer will be updated on the most recent and applicable laws and will ensure their client’s tax issues are handled correctly.

In addition to this, there are federal taxes that some individuals are not aware of when they are planning their estate. Estate taxes, also known as death taxes, are taxes imposed by the federal government which are owed by an individual’s estate after they pass away. The majority of estates will not be subject to this tax, as it typically applies to large estates.

A gift tax applies to cash or property gifts that an individual can give away annually. The limit for this annual exclusion is $15,000. A tax attorney can assist clients in planning what they give away and when in order to have the most tax advantages.

Do I Need to Hire a Tax Lawyer?

Yes, it is essential to have the assistance of an experienced tax lawyer with any tax issues you may face. As discussed above, tax issues may be complex and the laws are constantly changing. 

It is also important to be aware that the Federal Tax Code is amended annually. Therefore, even if you consulted with a tax attorney last year, the rules may be different this year. These amendments also affect state and local tax laws.

A tax lawyer can review your issue, assist you in filing any required paperwork, and ensure that you are in compliance with applicable tax laws. It is important to consult with an attorney as soon as you can in order to ensure you do not miss any important deadlines.