August 5th, 2019
In response to a Facebook question relating to tax professionals providing testimony as an expert witness, we offer some expert advice. First piece of advice: before you agree to provide expert testimony, you might want to contact your errors and omissions insurance provider to discuss any liability issues that could be connected to your activity.
Our next bit of advice comes to you courtesy of the often-quoted expert witness and Tax School Instructor Rich Walden, CPA.
Tax School: Rich do you find yourself often serving in the role of expert witness?
Rich Walden: Yes, I act regularly as an expert witness in lawsuits. Sometimes I act as an advisor to the attorneys in their role in a lawsuit or a disagreement.
Tax School: How should a practitioner prepare when asked to provide expert testimony?
Rich Walden: If you have not given testimony in court or in a deposition, I suggest that you seek a CPE course that prepares you for such an event. First, you must have the requisite knowledge as to the subject in order to be a credible witness. That requirement usually requires some review and refreshing of your knowledge. The attorney will supply you all of the information that you need to arrive at your conclusion.
Tax School: Any suggestions for ways practitioners should protect themselves?
Rich Walden: I usually prepare an engagement letter for the attorney or client to complete. The accountant’s time expended up to the testimony is far greater than the actual time giving testimony. I tend to bill at different rates for consultation and preparation time and actual time in deposition or court testimony. The rate depends on the complexity of the issue and the location in the state.
Tax School: What kind of fee schedule do you tend to follow?
Rich Walden: Outside of the Chicago area I bill a lesser amount than with a Chicago law firm. Consultation and preparation time is usually $150 to $225 per hour and testimony time is at $250-$325 per hour for me. The preferred method is to negotiate with the attorney and have the attorney tell you that your quote is too high. The client is usually paying your fee.
Tax School: Any final words of wisdom to offer our readers?
Rich Walden: You need to remember – your common answer to every question the attorney asks of you is either ‘yes’ or ‘no’. Do not offer anything else unless the attorney asks.
Tax School: So to quote Sgt. Joe Friday from the old Dragnet series, “just the facts ma’am!”
Rich Walden: If you say so…..
Interview edited for content and clarity.
Disclaimer: The information referenced in Tax School’s blog is accurate at the date of publication. You may contact firstname.lastname@example.org if you have more up-to-date, supported information and we will create an addendum.
University of Illinois Tax School is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information in this site is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information. This blog and the information contained herein does not constitute tax client advice.