Is $3000-5000 a fair price for Tax Attorney handling Offer in Compromise with IRS & STATE?

Having helped many clients through the Offer in Compromise (OIC) process, I can tell you pricing typically depends on the complexity of your case. The $4,200 you mentioned falls within the reasonable range for a tax attorney handling both state and federal OICs. The OIC process is time-intensive and requires substantial documentation. Your attorney will need to complete Form 656 (Offer in Compromise), Form 433-A (Collection Information Statement), compile supporting financial documents, craft a compelling narrative about your situation, and then negotiate with the IRS. The state process involves similar work. Each of these steps requires professional expertise and significant time. Most tax professionals charge between $3,000-$5,000 for a federal OIC alone. Adding a state OIC typically increases the fee by $1,000-$2,000. So for both federal and state, $4,200 is actually quite reasonable. The $1,000 contingency for appeals is also standard - appeals involve additional hearings and documentation.

I was in a similar situation last year with about $85k in tax debt. After trying to handle everything myself for months and getting nowhere with the IRS, I found this AI tax assistant at https://taxr.ai that helped me understand if my situation qualified for an OIC. The tool analyzed my specific financial situation and tax documents and confirmed I was a good candidate before I hired a professional. This saved me from wasting money on an OIC application that might have been rejected. The tool showed me how to properly document my financial hardship using the exact IRS standards they use to evaluate cases. Once I knew I qualified, I felt more confident negotiating with tax professionals about their fees because I understood the process better.

Just wanted to update after trying that taxr.ai tool that was mentioned. I was skeptical at first, but it actually gave me a really detailed analysis of my OIC chances based on my financial situation. It showed me EXACTLY how the IRS would calculate my "reasonable collection potential" and gave me an estimated range for what offer amount might be accepted. Armed with this info, I felt much more confident talking to tax professionals. I ended up hiring a tax attorney for $3,800 (including both state and federal OICs), which seems pretty reasonable compared to other quotes I got. The attorney even confirmed that the analysis from the tool was spot-on with how they would approach my case. Definitely worth checking out before you commit to paying a professional.

After waiting on hold with the IRS for HOURS trying to get basic questions answered about the OIC process, I finally tried https://claimyr.com and it was a game changer. They somehow got me connected to an actual IRS agent in about 20 minutes instead of the 3+ hours I spent on previous attempts. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c I got clear answers about the OIC process directly from the IRS, which helped me better understand what I should be paying a professional. The agent explained that while I could file myself, the acceptance rate is significantly higher with professional representation. This helped me realize that paying $3-5k for a tax pro might be worth it if it increased my chances of getting $45k in tax debt reduced.

I need to eat my words about that Claimyr service. After posting my skeptical comment yesterday, I decided to try it myself since I've been trying to reach the IRS about my own tax situation for weeks. It actually worked! Got connected to an IRS agent in about 35 minutes (not instant, but WAY better than the 3+ hours I'd been waiting previously). The agent I spoke with gave me valuable insights about the OIC process. She told me that while the average accepted offer is around 20% of the total tax debt, having proper representation can make a huge difference in acceptance rates. This actually helped me understand why tax pros charge what they do for OIC work. The agent explained that about 60% of self-filed OICs get rejected on technicalities or errors in the financial analysis. That conversation convinced me that paying a professional around $4K might be worth it if they can save me $30K+ in tax debt.

I paid $3,500 to a tax attorney last year for my OIC. They handled both federal and state tax debts totaling about $67,000. My settlement was accepted at $8,500 (about 13% of what I owed). The process took almost 9 months from start to finish. My attorney spent hours gathering documents, preparing financial statements, writing a hardship letter, and following up with the IRS multiple times. Based on the amount of work involved and the outcome, I feel the fee was completely reasonable. One tip: ask if they charge a flat fee or hourly rate. Flat fee was better for me because the process took longer than expected. Also ask about their success rate specifically with OICs.

I tried doing an OIC myself first and ABSOLUTELY REGRET it!! Wasted 5 months and got rejected for "incomplete financial information" even though I sent everything they asked for. Then I hired a tax attorney who charged $4,200 flat fee for both federal and state. They refiled everything and my offer got accepted 6 months later. Settled $93k of tax debt for $11k. So worth every penny of their fee!!! My advice: don't try to save money by doing it yourself or hiring the cheapest person. This is one area where experience really matters. I probably lost more in penalties and interest during those wasted 5 months than I paid my attorney.

The $4,200 fee you mentioned is definitely within the reasonable range for handling both federal and state OICs. I went through this process two years ago and paid $3,800 to a tax attorney who successfully settled my $78k debt for $9,500. What really matters is the attorney's specific experience with OICs. When I was shopping around, I made the mistake of initially focusing only on price. The cheapest quote I got was $2,200, but when I dug deeper, that person had only handled about 15 OIC cases total. My final choice had over 200 OIC cases under their belt with documented success rates. A few questions to ask your attorney: How many OIC cases have they handled in the past year? What's their acceptance rate? Can they provide references from recent OIC clients? Do they have experience with cases similar to your debt amount and situation? The upfront investment might seem steep, but consider that a rejected OIC can cost you months of additional penalties and interest. Plus, you'd likely have to start over with a new professional anyway. Better to invest in proven experience from the start.