The Cost of Free Consultation

By Alvaro Acevedo

Would you risk paying a 20 million dollar penalty including interest for a cheap tax lawyer? It is amazing to see how many people ask whether I give a free initial consultation. That bare statement should get bells and whistles going everywhere. If a lawyer has time to give it away, then something is going on because time is the only thing a lawyer can give. I came across a brand new opinion that just came out on the 24th of July from the 11 circuit court of federal appeals. Basically, some company decided to hire a so-called tax lawyer, whom I'm pretty sure did not specialize in tax law (otherwise he/she is a scum) who provided inexpensive services and free initial consultation. Long story short, the structure design was a sham to evade taxes on a partnership, very poorly designed, and the IRS hit this entity with a fresh 20 million dollar penalty (not a tax, just a penalty, and interest). The tax court didn't even hear the case and the appellate court affirmed. I seriously believe that there are better ways to save money than getting the cheapest possible tax lawyer, especially if the first consultation is for free. Good luck with that. The case is Highpoint Tower Technology Inc v. Commissioner, No. 18-10394, 2019 BL 273129 (11th Cir. July 2019).