However, it turns out that tax advice or representation of contingent fees is the exception, not the rule. One place where contingent charges can be especially useful is when the taxpayer is trying to get the money from the IRS in a lawsuit. tax refund claims can be loaned at a contingent fee, and the IRS has approved contingent charges in that context. Yes, that's right, this is an area regulated by the IRS.
So, for starters, whether your tax advisor can offer you services in the event of a contingency depends on the contingent charges allowed by the IRS. In regulations known as Circular 230, the IRS says that a professional cannot charge a contingent fee for services rendered in connection with any matter before the IRS, with three exceptions.