Hoboken, NJ asked in Tax Law for New Jersey

Q: How to handle being significantly overcharged for tax preparation fees?

I engaged an Enrolled Agent to prepare my 2018 tax return. He filed for an extension for me and has been almost completely unresponsive (for months) to requests for status causing me to miss the extension deadline. When I finally received the prepared return I got an invoice for $3000. Several CPAs and Enrolled Agents quoted me between $500-1200 for the same exact return. I did not get a quote from this EA up front and signed an engagement letter. I’ve requested a breakdown/explanation of the fee, copy of the engagement letter and to re-evaluate his fee given the experience and other quotes, plus penalties caused. He defended his fee and ignored my requests for information/copy of our engagement letter. Aside from filing a complaint with the IRS, how do I handle this and not get sued or sent to collections and ruin my credit for non payment? Do I agree to pay and then sue for malpractice? I would even settle for a discount to end this but he won’t. I feel like I’m trapped.

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1 Lawyer Answer
Andrew M Steiger
Andrew M Steiger
  • Tax Law Lawyer
  • St. Clair Shores, MI

A: Without receiving more info from him, I wouldn’t pay. Sounds like he breached whatever contract you may think you have with him, but maybe he knows his bill doesn’t square with his fee. If he threatens to go to collections, threaten to take him to small claims court and notify the BBB. Settling like you said may be an option for the value of services rendered, but filing late and lack of communication shouldn’t be worth much. That’s his job.

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