The retainer fee is a down payment for legal representation before a government agency on your behalf. This fee and the fee for additional time spent beyond the retainer fee includes preparation of financial materials for submission to the agency and for representation during negotiations. In limited cases, due to the transitional nature of a given client’s financial circumstances, extra work must be conducted. In situations like this a client will be forewarned of the possibility for such a happening to have an opportunity to determine the most beneficial course to take depending upon your priorities. Total fees paid by clients on average typically range between $1,500 and $10,000 depending upon the four factors referenced below.
Fee Structure for Full Service Professional Representation
The Law Office of Elizabeth Gonsalves charges most of its clients a retainer fee to conduct a resolution. While we track our time, faxes, letters, research, and other work performed, we find that our clients experience a significant benefit from being charged a lesser fee for client communications than for resolution research and negotiation. This is particularly true given the situation most of our clients are in, they are stressed about the taxes they owe and want to feel a sense of control over their finances. The most important variables that will dictate the amount of work required by us to resolve your case depends primarily on four factors: 1) the amount of tax owed, 2) the type of tax owed, 3) the responsiveness of our clients to our requests for documents, and 4) whether you have tax owed to more than one agency (i.e., federal and state).
Amount of Tax Owed
Type of Tax Owed
The Responsiveness of Our Clients
Owing One or More Revenue Agencies
Amount of Tax Owed
The higher the delinquent tax balance is, the more difficult negotiation becomes with government agencies. The reason for this is the government agency sees more at stake for the government if they are unable to collect the tax balance owed. If you owe $10,000 to the IRS and the IRS has ten (10) years to collect the tax, the IRS has greater assurances they will be able to collect the unpaid tax, through withholding refunds in future years and levy activity. Further, if they do not collect the full amount of tax owed, the amount left uncollected is less. Therefore, the IRS is far more lenient with such a taxpayer than they would be with a taxpayer owing $300,000, where the chances of collecting the unpaid tax within ten (10) years are significantly less. When high balances are owed to a revenue agency the work required to protect your assets becomes far more challenging. The rules for collection also become more aggressive when a higher tax balance is owed. A revenue agency is more inclined to seek payment from liquidation of an asset to pay the balance down. For example, the IRS may attempt to liquidate a retirement fund when more than $25,000 is owed. More work is required of the representative to convince the IRS to forego their right to require early liquidation.
Type of Tax Owed
The type of tax owed can be indicative of the level of complexity to the case and the amount of work that will be required to bring it to resolution. For example, a company having payroll tax delinquencies must request a payment arrangement to resolve past payroll taxes owed, while simultaneously meeting its requirement to pay current payroll taxes if it is in operation during the negotiation. Once a payment plan is in place, a revenue officer could decide to make a personal assessment of civil penalties against an officer of the corporation. This is what’s called a Trust Fund Recovery Penalty. There are essentially two separate assessments of tax requiring more work of your representative. You can learn more about Trust Fund Recovery Penalties by clicking on our Free Tax Advice tab above.
The Responsiveness of Our Clients
One of the most important requirements to a speedy resolution of a client’s case depends upon the time it takes the client to gather requested documents to submit for resolution. When we receive documents from our clients and conduct a financial analysis, we often find there are additional documents that will be required by the revenue agency to consider the resolution package complete. Revenue agencies must have recent documents, such as bank statements covering the past three months. If a client delays in getting a child support expense document to us timely, the other documents submitted become too dated to submit. For this reason, the goal is to get all documents needed from our clients in right away. Clients that delay in getting requested documents in to us compromise our ability to resolve your case quickly.
Owing One or More Revenue Agencies
When a client owes taxes to the federal government and the state at the same time, this requires a more strategic approach to case resolution. While your data will be used for both federal and state disclosure purposes, the challenge is in timing and cross referencing resolutions before two separate revenue agencies, each being solely focused on their need to collect without regard for the other agency’s objectives.