Awful Truth: If you’re having a tax issue, you’ve probably spoken to several companies about getting help. Maybe some of them sounded good, some sounded not so good. But there’s a good chance some of these companies have mentioned the word “Retainer Fee” over the phone. It sounds a little strange and it probably wasn’t explained very well. All you want to know: what is it and how does that affect you?
What is a Retainer Fee? A Retainer Fee, by definition, is an advance payment on the hourly rate for a specific case. This basically means it’s a “prediction” for the service of an attorney. They assume that the work they are going to perform is going to cost at least that amount. Many companies implement this because attorneys are known for wanting to get paid before they actually do any work.
What that Means to You? When a company has you pay a “Retainer Fee,” one of the clauses of that agreement is that the fee is “subject to change.” As most of us know, anytime a business can get more money out of you they usually will. So these guys will take your money for a “retainer” (usually between $1000 and $2000 dollars) and then change it later by saying the case needs more time, attention, and therefore more money.
Does the Price always Change? It would be inaccurate for me to say that the price always changes. But I’ve seen it happen in several cases. Someone puts $1500 dollars down on a case, and then a few weeks later the company asks for another $1500. Then they keep “working” on the case and a month later they ask for another $1500. It’s a sad thing but it happens to people every day.
How to Avoid It: If or when you hear the words “retainer fee,” hang up the phone. You don’t want to take the risk of falling into a situation like that; where you pay much more than you bargained for. Now you have the knowledge, you can be armed when you get calls from those tax resolution companies.
Now you have the Smoking Gun…Use It!