How Much Does a Tax Attorney Cost on Average?

Updated on July 17, 2020
Closeup of tax wooden blocks on mallet at table in courtroom

Most of the time when someone thinks of hiring an attorney the first thought that comes to mind is how much is this going to cost me? If you were currently contacted by the IRS and are in need of a tax attorney but are wondering how much does a tax attorney cost, you are in the right place.

We are going to break down the fees that you can expect to pay.

How Much Does a Tax Attorney Cost?

The truth is that a tax attorney’s fees will vary. The cost will be based on why you need a tax lawyer in the first place. Another cost factor will be the type of experience your attorney has because the longer they have been practicing the more they usually charge.

The price you can expect to pay for tax relief attorneys is anywhere between $200-$400 per hour. The most common pricing structure is an hourly rate and larger firms that are in larger cities might charge you up to $1000 per hour. 

Some attorneys might charge a flat fee which might be easier in some cases. You will only have to worry about a one time fee to cover the services you need no matter how much time your attorney spends on your case. Most attorneys offer this option when they feel that the case if going to be pretty simple or that it is going to be a routine case. 

Different Tax Fees

There are a few tax cases that are pretty common and you can expect to pay a certain average depending on the area that you are in. The final fee you pay will also depend on your case. 

Installment Agreement

An installment agreement with the IRS is a proposed agreement that you present to the IRS to allow you to pay off debt through a monthly payment plan. Keep in mind that the IRS encourages debt to be paid off immediately which means that they will charge interest if they accept the agreement.

The interest penalties you can expect to pay will vary between 8-10% per year. An installment agreement will cost between $750 to $1500 to file. The attorney will complete a Form 9465 to request the monthly payment plan. 

First-Time Penalty Abatement

For an FTA you can expect to pay between $1,000 to $2,500. This option is ideal for first-time non-compliant taxpayers. If you failed to pay or you failed to file and it is your first offense then you can apply for this abatement. 

The IRS might qualify you for relief if you filed an extension of time to file or you filed all currently required tax returns. You might also qualify for relief if you did not previously have to file a return or if you do not have any penalties for the previous three tax years. 

Simple IRS Audit

If you ever go through a simple IRS audit you can expect to pay an attorney between $2,000 to $3,000. If the audit is more extensive or complicated it can cost $5,000 or more. 

During this process, the IRS wants to ensure that the information that was reported about your organization is accurate and correct. All of the reported amounts of tax are verified to make sure that it is correct. 

Offer in Compromise

An offer in compromise or OIC is an agreement that a taxpayer will offer the IRS to try to settle their tax liabilities for less than the original amount that you owe. If you can fully pay for your debt through an installment agreement or another way, you probably won’t qualify for an Offer In Compromise. 

A tax attorney will charge on average between $3,500 to $6,000 to handle an Offer in Compromise for you. Your attorney will complete Form 656 to get your case started. 

IRS Appeal

If you end up disagreeing with the conclusion from the IRS you have the right to request an appeal through a written protest. The Office of Appeals will review the case after the IRS makes its decision. 

An attorney will charge around $5,000 for a simple IRS Appeal. In this type of case, the lawyer will file a written protest where they request an appeal and then they have to wait for an answer. 

Appeals are a long process that you need patience for. Be prepared for a long and arduous process when going through an IRS appeal. This is definitely a time that you will want an expert in your corner because they will know what to file and what to say to help the case go in your favor. 

Tax Court Litigation

In case everything fails you might have to go to US Tax Court. The costs for this will start at $10,000 and will go up from there, depending on what you owe the IRS. When it comes to dealing with litigation and tax laws you will need an attorney’s assistance to help you out. 

Ready to Hire a Tax Attorney?

Now that you know the answer to the question “how much does a tax attorney cost?” you can look for an attorney that can fit into your budget. Don’t forget to call around and find a lawyer that you feel comfortable representing you.  

It is best to let a professional represent you unless you have experience with tax laws and the legal system. 

Did you find our blog post helpful today? Please feel free to browse the rest of our site to always stay in the know.  

The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.