randomguy6
Junior Member
What is the name of your state? TN/CA/GA
In 1999 I incurred a very large federal tax bill. After the market crash I was unable to pay this off, which grew to some $1.7m after penalties factored in. In Oct 2002 I sought the help of a tax lawyer to help resolve this situation before the IRS took real action against me, and I ended up choosing a lawyer in CA (I lived in GA at the time and moved to TN in Dec 2002).
After an initial review, the lawyer advised me that I was ok since the IRS had not yet assigned a human to my case, so at this time just need to prepare. As part of the prep he said that it would be "smart" to pay into his trust account an amount to cover my expected upcoming legal costs. He explained that by doing so it would be possible to refund later at the end of my case any unused portion. This sounded like a smart plan to me, so I asked him what is the maximum amount I could provide for any future work, and he replied with an amount $160k. I asked some more questions and he replied that: "Depositing a large amount of retainer does not guarantee the IRS will seek to collect it, BUT I DOUBT IT WOULD DO SO."
Based on that, I sign a contract & fund the $160k, expecting to get most of this back at the end of my case. Fast forward to Oct 2003. The IRS still has not assigned someone to me, but he suggests we do a reanalysis of my affairs. In this review he now says: (1) The prepaid fees are "problematic", that there's an "80% chance" IRS will demand I include this money in a settlement with them, that they may do a "jeopardy levy", the IRS will be severely pissed off at me, and that this will hurt the chances of me completing an offer with them. (2) I am left with only two strategies, one where I leave things as is and suffer all the things mentioned above and almost certainly lose the money, or I can sign an addendum with him where he immediately earns all the money nonrefundably. His words: "The bottom line here is that whether you go with strategy one or two, your $125k is already spent. Either the IRS gets it in an accepted offer, or less likely, by a jeopardy levy, or I get it in the form of legal fees where you get my continued expert representation at a locked in price."
At that point I am very pissed, but left with only what he is telling me. I feel forced to sign the addendum, and do so. To wrap up, my case is resolved with a successful offer in summer 2004 in a very easy fashion. I don't feel he did anything near earning this much money. Any chance of breaking this contract, and getting back some of this money? Really what I'm looking for answer-wise is whether this is worth pursuing with a high-paid local lawyer in Nashville, and if so what you think the odds are of overturning this contract.
In 1999 I incurred a very large federal tax bill. After the market crash I was unable to pay this off, which grew to some $1.7m after penalties factored in. In Oct 2002 I sought the help of a tax lawyer to help resolve this situation before the IRS took real action against me, and I ended up choosing a lawyer in CA (I lived in GA at the time and moved to TN in Dec 2002).
After an initial review, the lawyer advised me that I was ok since the IRS had not yet assigned a human to my case, so at this time just need to prepare. As part of the prep he said that it would be "smart" to pay into his trust account an amount to cover my expected upcoming legal costs. He explained that by doing so it would be possible to refund later at the end of my case any unused portion. This sounded like a smart plan to me, so I asked him what is the maximum amount I could provide for any future work, and he replied with an amount $160k. I asked some more questions and he replied that: "Depositing a large amount of retainer does not guarantee the IRS will seek to collect it, BUT I DOUBT IT WOULD DO SO."
Based on that, I sign a contract & fund the $160k, expecting to get most of this back at the end of my case. Fast forward to Oct 2003. The IRS still has not assigned someone to me, but he suggests we do a reanalysis of my affairs. In this review he now says: (1) The prepaid fees are "problematic", that there's an "80% chance" IRS will demand I include this money in a settlement with them, that they may do a "jeopardy levy", the IRS will be severely pissed off at me, and that this will hurt the chances of me completing an offer with them. (2) I am left with only two strategies, one where I leave things as is and suffer all the things mentioned above and almost certainly lose the money, or I can sign an addendum with him where he immediately earns all the money nonrefundably. His words: "The bottom line here is that whether you go with strategy one or two, your $125k is already spent. Either the IRS gets it in an accepted offer, or less likely, by a jeopardy levy, or I get it in the form of legal fees where you get my continued expert representation at a locked in price."
At that point I am very pissed, but left with only what he is telling me. I feel forced to sign the addendum, and do so. To wrap up, my case is resolved with a successful offer in summer 2004 in a very easy fashion. I don't feel he did anything near earning this much money. Any chance of breaking this contract, and getting back some of this money? Really what I'm looking for answer-wise is whether this is worth pursuing with a high-paid local lawyer in Nashville, and if so what you think the odds are of overturning this contract.
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