Once you decide to retain lawyer services to enter the OVDP, you face multiple dilemmas regarding your choice of representation. One of the most important factors that clients take into account are fees. Let’s see how important representation fees are in the big picture of your tax report.
How does an OVDP lawyer charge?
Some attorneys charge a fixed flat fee for their services. The amount of a flat fee is affected by the complexity of the case. What is usually factored into the fee is: the number of foreign accounts the client has, the scope of mutual fund investments and ownership of foreign companies. Once you get a quote from an OVDP attorney you are considering, they should be able and willing to give you a break-down of the quote.
Other lawyers charge hourly fees. In this case, the tax preparation might be a fixed fee and possibly outsourced, whereas the attorney’s time is charged per hour. When you are considering an attorney with this billing model, you’ll want to ask for an estimate of the total cost. An experienced OVDP lawyer will typically charge more, but their services may not cost you more in the end. Obviously, a less experienced lawyer generally charges less, but they would probably need more time to process your case. Finally, the bill may be roughly the same.
Regardless of the type of fee an attorney charges, you should beware quotes that seem too low to be true or too high. There are unscrupulous attorneys who prey on the client’s vulnerability. They will offer unreasonably low fees, but require additional payments down the line. On the other hand, if an attorney charges extortionate fees, some clients could assume that those fees are reflective of the quality of attorney’s services. That may not be true, though. Sometimes, the cost of attorney’s advertising and marketing is passed on to the client.
As you ask OVDP attorneys for estimates, it’s wise to focus on the value of their services, rather than just the cost.
What other important considerations are there apart from fees?
You should compare different offers on various levels, not just lawyer fees. Some of the questions you should ask potential lawyers are:
- What is your litigation experience?
- Have you ever assisted a client during an IRS audit?
- How long have you practiced as an attorney?
- Do you have a degree in tax law (LL.M.)?
Reality is that you never know how the situation will pan out. People may be rejected for the OVDP because the IRS has already started an investigation. Or you may decide to opt out or argue penalty reductions, in which case you need someone with relevant experience in litigation.
What does an OVDP lawyer offer you for the fees charged?
You may be thinking that you can get practically the same services from a CPA and thus save money. As we have said above, it’s prudent to look at the big picture and consider the value of services and not just the cost.
When you retain legal services, you get attorney-client privilege. You can be completely honest about your case without fear that your attorney will have to tell the police or IRS what you have discussed. It should be noted, though, that the privilege springs into effect once you retain attorney’s services. In addition to that, you can be sure that even though there is a certain level of CPA-client privilege, its extent is a far cry from the attorney-client privilege.
An OVDP case requires extensive legal and tax analysis of your case, as well as a deep understanding of the legal consequences regarding willful and non-willful behavior. This flies high over the knowledge and abilities of a CPA. A CPA is not allowed to and should never provide legal advice. Only a tax lawyer is competent to inform you of the legal ramifications of the OVDP and your noncompliance with the program.
CPAs don’t have litigation experience. But, it’s important that you find not just an attorney who has litigation experience, but also audit experience.
There are matters that a CPA cannot help you with. Sometimes they will even give you misinformation to reduce the scope of work on your case, so they can deflate their fees. But even if that’s not the case, and you start out your OVDP with a CPA, but then you get audited or decide to opt out, you’ll need an OVDP lawyer. However, the attorney-client privilege that you’ll want will only be effective from that moment forward. The information you gave to the CPA you initially worked with will be accessible to the IRS.
If you need experienced help to apply for the OVDP, contact Brunoro Law, APC
Based in San Diego, Brunoro Law serves clients throughout the United States and around the globes in all matters related to tax law and business transactions. We are eager to offer you our expert legal guidance. Feel free to contact us for a free, no-obligation case consult!