A tax attorney is an attorney who specializes in the interpretation and application of tax laws and policies. Tax attorneys can perform a wide array of services for their clients, including the preparation and filing of taxes. Tax attorneys are knowledgeable about tax laws, regulations, and policies at several levels—federal, state, and municipal. In addition to preparing tax returns, tax attorneys can:
• Represent clients in disputes with tax authorities.
• Advise clients about the tax implications of estate transfers, property acquisitions, business transactions, and the different structures of businesses.
Protecting A Client’s Rights
A tax attorney can help protect your rights and negotiate with the IRS on your behalf. With their in-depth understanding of tax law, tax attorneys are well qualified to act as a go-between with their clients and the IRS and are skilled at:
• Challenging IRS rulings in court
• Settling back taxes
• Halting wage garnishment
• Undoing property liens
• Removing account levies
• Negotiating compromises with the IRS
If the IRS has assigned an agent to your case, it usually means that the IRS is close to taking action against you.
If you do not already have a tax attorney, this is a clear sign that you might want to contact one.
Providing Personal Wealth Management Assistance
Many taxpayers hire tax attorneys to help reduce their tax liabilities in advance of filing a tax return. A tax attorney can provide related legal documents and offer advice on how to manage your personal wealth to minimize your taxes. Other wealth management services tax attorneys offer include:
• Estate planning
• Creating wills and trusts
• Incorporating businesses
• Drawing up business contracts
• Advising on international tax considerations
When To Hire a Tax Attorney
When you owe back taxes to the IRS, the last thing you need is another bill. So, it’s natural to wonder if you can solve your tax debt on your own without having to hire an attorney and spending thousands of dollars you probably don’t have. The truth is that most tax problems can be resolved without having to hire an attorney, assuming you’re willing and motivated to learn how to do it yourself. This article will give you some more detailed guidelines for deciding when you should hire a tax attorney.
You might not need to hire a tax attorney if all the following are true:
• You owe less than $50,000 to the IRS
• You are not self-employed or do not own a small business
• You do not have unreported income or other indicators of tax fraud
• You have not been contacted by an IRS Revenue Officer
• You’re not intimidated by the idea of talking to the IRS
• You’re willing to spend time figuring out the correct forms to use and how to fill them out
The above criteria mean that your case is fairly simple and straight forward. It’s likely that you can handle resolving such a case on your own without spending money on expensive help. However, it’s going to take some work.
Just like any DIY project, you’re going to save money with sweat equity. You probably need to hire a tax attorney if any of the following are true:
• You owe more than $100,000 to the IRS
• IRS Revenue Officer is assigned to your case,
• You are self-employed or own a small business
• You have a complicated or unusual financial situation
• You’re intimidated by the IRS and don’t feel comfortable talking to them on your own
• You’re willing to hire someone to save yourself the time and stress of trying to figure it out yourself
If any of the above characteristics describe your situation, you stand a good chance of getting a better outcome by hiring a tax attorney than you would on your own. This is because your case is more complicated and is going to get more scrutiny from the IRS. It would be smart to have a tax attorney to prepare your financial documents and handle the negotiations. This could mean the difference between acceptance and rejection of your offer in compromise, or paying more for your offer than would otherwise have been required.
You must hire a tax attorney if any of the following are true:
• You have unreported income or other indications of tax fraud
• You have undisclosed foreign bank accounts
• You owe more than $1,000,000 to the IRS
• You have valuable assets that you want to protect and keep away from the IRS
If any of the above apply to your situation, then it would be very wise to at least consult with a tax attorney to evaluate your case and then hire one if appropriate. You are in the “danger zone” of IRS tax collections and could be looking at forced asset sales, business closures, criminal tax prosecution, and other negative consequences that can last for years to come. At the very least, you should find and consult with a qualified tax professional for a review your case.
Beware Tax Debt Relief Companies
Chances are you’ve already received a bunch of direct mail advertisements from various companies, law firms, and CPAs offering to help solve your tax debt. Beware the promises these companies are making. There are a lot of dishonest tax resolution providers who will prey on your desperation and take advantage of you while you’re at your lowest point. They are notorious for charging outrageous fees and doing nothing to actually resolve your tax debt.
To avoid getting ripped off by one of these companies, you should do as much research as possible. Learn about the options for resolving your tax debt, and try to get a grasp on what is realistic in your case and what isn’t. Also, find out as much as you can from independent sources about anyone you are considering hiring and be especially wary of anyone from out of state.
A tax attorney is a lawyer who specializes in tax law. Tax attorneys’ help people arrange their finances to optimize their tax situations, comply with tax rules and handle disputes with the IRS or other tax authorities. Some specialize in areas such as estate, international or business taxes.
• Tax attorneys often practice at law firms or accounting firms. Some may be solo practitioners, meaning they own their businesses and work for themselves.
• Tax lawyers at law firms tend to advise clients about what to do to get favorable tax treatment in various situations. They may draft contracts or other legal documents needed to make it happen, and they may represent clients in tax court or elsewhere.
• Tax lawyers at accounting and consulting firms tend to help clients more with complying with tax rules.
When It’s Worth Hiring A Tax Attorney
Some situations may be especially suited for hiring a tax attorney.
A tax attorney can help you devise estate planning strategies and handle the paperwork involved in minimizing estate taxes, transferring assets to family members, setting up trusts and other tactics.
Starting A Business
A tax attorney may be able to help devise tax-smart strategies for starting, buying, selling or expanding a business.
If you have a tax dispute; want to sue the IRS, the state or a local tax authority over a tax matter; or if you want a hearing before Utah Tax Court, a tax attorney can help.
If you have an outstanding balance with the IRS or other tax authority that you want to negotiate or contest, a tax attorney may be able to help you pursue options such as:
• Offer in Compromise
• Innocent spouse relief
• Installment plans to pay tax bills over time
Here are three things to check for.
1. A law license: An attorney must have a law license to practice law. You can verify whether a tax attorney has a license to practice law in your state by searching your state’s bar association website.
2. Signs of advanced education or specialization: In most states, you must also graduate from law school in order to get a law license. Some tax attorneys have a master’s degree in taxation (called an LL.M). Some tax attorneys also have CPA licenses, which mean they are also certified public accountants.
3. A preparer tax identification number (PTIN). Anybody who prepares tax returns in exchange for compensation must have a PTIN from the IRS. The preparer must sign your tax return and provide a PTIN.
In general, legal work isn’t cheap. Tax attorneys charges between $295 to $390 per hour on average. The attorney’s length of experience can move the figure lower or higher. The firm also has data showing 37% of people who use legal representation for taxes spend from $0 to $5,000, and another 14% spend $5,000 to $100,000. About a quarter have the work done pro bono, or free of charge, and 4% have it done on contingency (where the attorney receives a portion of the damages if any are awarded). You might be able to get free or low-cost help from a tax attorney by visiting a low-income tax clinic, known as an LITC, in your area. These clinics represent people with income below certain levels and who need to resolve tax problems with the IRS. LITCs can represent you in audits, appeals and tax collection disputes before the IRS and in court. LITCs can also help people respond to IRS notices or fix account problems. You can locate a local clinic on the Taxpayer Advocate Service website.
CPA vs. Tax Attorney: What’s the Difference
Tax season can be a difficult time for individuals and businesses. Whether this is your first year filing complex taxes or you’ve let years of tax debts add up, help is available. There are a few different options when it comes to entrusting a professional with your tax case. Two of the most popular options are certified public accountants (CPAs) and tax attorneys. Knowing which is right for you comes down to your unique needs and goals, as well as the status of your case with the Internal Revenue Service (IRS). Tax debt is no small matter. Protect yourself with the correct tax professional for your situation.
What Is a Certified Public Accountant?
CPAs have five-year business degrees under their belts, with at least 150 hours of education. They also passed the intensive CPA exam and continue to complete at least 120 hours of continuing education every three years. A CPA is not the person you’d see at your average tax preparation chain. These are employees who have undergone about 60 to 80 hours of training. A CPA is much more knowledgeable and experienced in tax preparation.
You might need to hire a CPA to do your taxes if you have complicated tax situations. For example, if you own a business, are divorced, have children, and have investments with high net worth, you’ll want to spend the extra money on a CPA to prepare your taxes. The more money you have coming in and out, the more a CPA can benefit you during tax season. CPAs know how to abide by federal laws while still minimizing your tax liability and maximizing benefits. If you want to develop an ongoing relationship with a tax professional, hire a CPA. Finding a CPA you trust can mean returning to the same professional year after year for a simpler tax process. A CPA can come up with a long-term tax plan and help you stick to it, as well as help with monthly and annual accounting services. Paying quarterly taxes, creating a financial plan, and undergoing audits are easiest with a CPA by your side.
Choosing the Right Type of Tax Assistance for You
If you’re on the fence about whether to hire a CPA or a tax attorney, consider the tax matter at hand. Do you have to muddle through complex personal or business taxes and want to minimize tax liability? Go with a CPA. Are you in trouble with the IRS, receiving debt collection notices, or involved in a tax controversy matter? Hire a tax attorney. If you need an attorney, don’t hire a CPA to save money. You’ll only end up getting into deeper trouble with the IRS – something that could end in much more costly losses than paying for a tax attorney. You might need to retain a tax attorney if you’re in a complex case involving tax agents or revenue officers. If the IRS has assigned a revenue officer to your case, it means you’re very close to receiving a levy on your bank accounts or wages. In these cases, confide in a tax lawyer to protect your rights and advise you on how to stay out of trouble. Legal representation can be paramount in negotiations and discussions with the IRS if you owe taxes or if you’re facing allegations of tax fraud. If you have a serious tax problem, go to a tax attorney, not a CPA.
Another way tax lawyers are helpful is with tax planning. If you need someone to come up with a tax plan that minimizes your liability, trust an attorney to structure your assets. An attorney has undergone more training in dispute resolution than the average CPA. If you only need basic tax preparation and aren’t in trouble with the IRS, consider a CPA or even an enrolled agent (EA). An EA is like a CPA, except that an EA doesn’t have to have as much experience or training. EAs typically cost the least out of EAs, CPAs, and attorneys. Just remember – an EA or CPA might not be helpful if you’re involved in a tax dispute.
Free Initial Consultation with Lawyer
It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506