Work with skilled attorney to build strong tax case, obtain IRS award of fees, P.2
Previously, we began looking at the topic of attorney fees associated with fighting IRS allegations. Specifically, we’re looking at the requirements for a taxpayer to obtain payment of attorney fees. We’ve already mentioned the requirements that the taxpayer must prove he or she was the prevailing party, and the IRS’ burden of proving that its position was reasonable.
Several other requirements apply to IRS payment of a taxpayer’s attorney fees. One of these is that the taxpayer must be cooperative in resolving the tax dispute. It specifically means that the taxpayer must satisfy all the administrative requirements associated with each step of the process, both in the audit and the appeals process. A taxpayer must make a good faith effort to comply with the process, rather than digging in his or her heels all the way to Tax Court.
Another requirement for obtaining attorney fees is that the taxpayer must not act to unreasonably delay the proceedings. This is related to the previous requirement, but is more specifically focused on the issue of time. A taxpayer may generally be cooperative with the IRS, but if he or she takes too long in responding to requests for information and meeting other requirements, he or she may not be entitled to an award of attorney fees. Taxpayers, therefore, have incentive to not waste time in the audit and appeals process.
Finally, attorney fees must be reasonable, both as to the time and amount fees are to be awarded. This means that attorney fees can be requested at the appropriate time but not before, and that the fees the taxpayer requests for his or her attorney is fair. Typically, higher fees can be requested when the case involved difficult issues and took more time.
A skilled tax attorney is an important asset in resolving an IRS dispute, and taxpayers should be sure to work with an attorney who has a strong understanding of the specific issues in his or her case. Not only will such an attorney be able to provide the taxpayer the best opportunity to prevail on the issues in dispute, but he or she will be able to make a strong case for an award of fees so that the taxpayer isn’t stuck paying that bill.