Tax Attorney vs CPA: Why a Tax Attorney May Be What You Need

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As tax season approaches, many successful businesses fear dealing with the Internal Revenue Service (IRS). The most common fear is an audit, but that does not happen as often as you would think. Only about 2.5% of small businesses in the United States get audited every year.

It’s much more likely that your business needs to address a tax debt like back taxes since these can lead to a seizure of assets. Taking on the IRS by yourself means negotiating against people who know tax law better than you.

Hiring a financial advisor to help is the smartest move, but should you hire a tax attorney or a CPA? Keep reading to for a breakdown of a tax attorney vs CPA and when you should choose the former over the latter.

What is a Tax Lawyer?

A tax lawyer is a legal professional who graduated with a law degree and specialized in the very complicated world of tax law. A tax attorney must pass the bar in the state they wish to work just like any other lawyer. But what does a tax attorney do?

Tax attorneys can handle many kinds of difficult legal matters, including:

  • Audits
  • Back taxes
  • Unfiled tax returns
  • Wage garnishing
  • Account levies
  • Property liens
  • Negotiating with the IRS

Tax lawyers often specialize even further since tax laws in the U.S. vary greatly. For example, if you need to deal with an estate or trust, there are tax lawyers who only take on cases dealing with taxes in estates and trusts. This allows them to become experts in their field.

All tax attorneys help clients with dispute resolutions. They understand the intricate details of negotiating with the IRS and other financial institutions. They also can assist businesses with the legal aspects of tax preparation.

What is a CPA?

A CPA, or certified public accountant, does not have a law degree, but a five-year business degree. CPA programs require at least 150 hours of learning during those 5 years. They must also pass an extensive exam before graduating.

CPAs also must also participate in at least 120 hours of continued learning education classes (CLEs) every three years. The tax prep people you see generic chains like Liberty Tax or Block Advisors are generally not CPAs. However, they both provide similar tax services like:

  • Annual and monthly accounting
  • Quarterly taxes
  • Constructing a business financial plan

A CPA helps greatly with complicated business tax situations, especially when you have a lot of money coming in and going out. They’re well versed in federal tax laws to maximize your benefits while minimizing any tax liabilities.

Tax Attorney vs CPA: When is a Tax Lawyer the Better Choice? 

Trying to decide between hiring a tax attorney or a CPA? It depends on your business’s tax situation. Keep in mind that a tax attorney can do basically everything a CPA can do. But they also have the legal background and license to address court-based matters.

Hiring a CPA

The best time to hire a CPA is when you’re not dealing with any formal legal issues or extra-complicated tax matters. Choose a CPA when creating a basic financial plan for your business, or for your personal finances.

Both CPAs and tax lawyers can help you with simple tax preparation to minimize how much you owe the IRS while increasing your return amount. However, if your situation isn’t overly complicated, a CPA will cost you less than a lawyer.

Hiring a Tax Attorney

If your business faces legal tax issues, you need to hire a tax attorney because they have a deeper understanding of the legalities in the U.S. tax system. Hire a tax attorney if you’re one of the unlucky 2.5% getting audited this year or if you’re dealing with any other tax controversies. 

Choose a tax lawyer when receiving notices of debt collection. Or, if you get a letter from the IRS saying they’ve assigned a revenue officer to your account.

You should find a tax attorney for complicated tax preparation and when forming complex financial plans. Or, if the IRS puts a levy on your business’s bank account.

A tax lawyer can advise your business on major decisions like whether to switch to an S-Corp from an LLC. They can also point out the potential liabilities and any overall structure protections. Their law license then allows them to complete the legal documents needed to make things happen.

One of the biggest advantages of hiring a tax lawyer over a CPA is the protection of your business through attorney-client privilege. If you do end up in court, this legal protection of communications between you and your lawyer means you can seek help without the risk what you share privately coming out publicly in a trial.

Hire a Great Tax Attorney to Help with Back Taxes and IRS Issues

Now you should better understand the key differences between a tax attorney vs CPA. They both offer helpful tax services for your business, but a tax attorney wields greater power when dealing with serious tax issues.

Are you in need of a great tax lawyer to help with business back taxes or another IRS issue?

Check out the Silver Tax Group with knowledgeable tax attorneys specializing in the successful resolution of IRS problems! They offer a free case evaluation and competitive prices designed to help you get fair representation.

Contact the Silver Tax Group today to find freedom from tax debt ASAP!

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