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socrateaser, Lawyer
Category: California Employment Law
Satisfied Customers: 38910
Experience:  Retired (mostly)
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I hired a legal tax expert in San Jose. He reassured me at

Resolved Question:

I hired a legal tax expert in San Jose. He reassured me at our initial meeting that most of my denied audited exemptions he he could resolve in my favor, they where legal CPA certified deductions. The issue went on for over a year and a half. He turned my case over to a rookie on his staff and I started receiving double billings. No resolution as I asked them repeatedly over many months to negotiate a settlement, legal bills kept adding up. The long a short of it is no resloution at ALL in our favor from the IRS, and in addition a $70,000 legal bill! What options do I have for non- performance, or any other legal avenues.$ 152,000 IRS bill and now this, I have already paid the attorney $27,000.
Submitted: 5 years ago.
Category: California Employment Law
Expert:  socrateaser replied 5 years ago.

1. What is the "tax expert's" government licensure (attorney member of the State Bar of California; Enrolled Agent with the IRS; CPA licensed by the California Board of Accountancy; registered tax preparer with the California Tax Education Council)?

2. If you have a written contract for services, what does the contract promise as an outcome?

Thanks in advance.

Customer: replied 5 years ago.
BAck from dinner
Expert:  socrateaser replied 5 years ago.

I asked you a couple of questions in my previous response. Please review and provide an answer to each. Thanks.
Customer: replied 5 years ago.
He is an attorney, I did not read the contract that well (sad excuse), most of the stuff was talked about at our initial meeting, no promises and no mention of how high fees could go.
Customer: replied 5 years ago.
any more insight or plans of action or is that it I screwed up!
Expert:  socrateaser replied 5 years ago.
Sorry for the delay, but I try to be thorough.

Given that it's an attorney, you have the right, under California law, to demand mandatory fee arbitration, through the Santa Clara Bar Association (I assume you're in Santa Clara County). Here is the link.

A fee arbitration is different from a legal malpractice action in that the only issue before the arbiter is the validity or reasonableness of the attorney's charges. In general, you must review all of your bills and dispute each individual line item that you find is either invalid, because you contend that the service was not rendered, or unreasonable, because you contend that the charge is not consitent with what a similarly experienced attorney in similar circumstances would charge for the same service. This link to the State Bar checklist for fee arbitrators will show you what you need to try to prove.

You can also argue that the entire bill is unreasonable, but it is usually far more useful to argue every line item you dispute, in addition to making the general argument that the attorney accomplished practically nothing in exchange for the charges and that the charges are unconscionable (shockingly unfair) in relation to the amount of tax liability that you are attempting to avoid.

If you want to really get in the lawyer's face, then you would have to obtain another expert (I don't know if the lawyer you hired is a bona fide tax lawyer who appears before the U.S. Tax Court and Federal District Court), who is willing to testify that your attorney should have known that your chances of defeating the IRS on the specific issues involved is impossible or extremely unlikely.

This would cost you more money, of course, whereas the fee arbitration will be relatively inexpensive. For a $72,000 bill, the fee is 3% ($2,160). If you dispute a smaller portion of the bill, then the fee decreases correspondingly.

You can, of course, sue the attorney for malpractice, complain to the State Bar Disciplinary Commission, or file bankruptcy and thereby avoid the bill entirely. But, the fee arbitration may be the most effective means of dealing with this issue, before trying anything more aggressive.

Hope this helps.

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Customer: replied 5 years ago.