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Dissecting a Retainer Billing Statement from a Large Tax Resolution Company

Retainer Billing Practices 101


All large tax resolution companies bill by the hour. The contract you sign, usually titled an engagement letter, service or work agreement, may not clearly state that you will be billed by the hour, sometimes it is hidden with broad language and vague legalese not immediately recognized by non-attorneys.  The salesperson may tell you it is a "flat-fee" but then you will be surprised when they send you a retainer statement a month or two down the road asking you to "replenish" your retainer by sending them extra money (usually thousands).

Here is a copy of a "monthly retainer billing statement" from one of the larger tax resolution companies. I am currently working with this taxpayer to obtain a refund from this firm he fired after coming to me.


Please keep in mind that I don't mean to suggest that everyone who works at these companies are necessarily bad people, but they are pushed by their management team to get in as much money from their current clientele as possible. So although you would reasonably assume that your interests are aligned with theirs i.e. they get the best results for you and get to brag about it, sounds reasonable, but the reality is their priority is to milk you for as much of your money as quickly as possible, over and above the initial retainer or fee. They will not resolve your case, in fact they will stall, until they can manipulate as much money out of you as possible.  The same seedy tactics that are employed by used car dealers and mechanics to rip you off are prevalent in the tax resolution industry. 

This client was charged $612.56 in overhead expenses alone.  I really feel bad for taxpayers who go with companies like this, especially when their are better alternatives out there to resolve their tax liability (although it seems like all companies that start out with good intent eventually fall to their owners greed).  Bottom line:  hire an independent who takes pride in their craft and not just their monthly quota.    

Click on the images to enlarge. 













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