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Tax Attorney vs Enrolled Agent: What Are We and What to Expect

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    A business relies on ethical, reliable, and experienced professionals to reduce their tax burden and stay compliant with tax regulations. Working with a qualified team of tax professionals is beneficial whenever you face a complicated tax problem. These experts have vast experience handling tax issues and can make tax season less stressful. 

    Choosing the right tax attorney or enrolled agent to help with your tax issues is like selecting a dentist, mechanic, or plumber. You need to find the right fit for your unique situation, and you may be considering the benefits of a tax attorney vs enrolled agent. This guide explains the differences between these tax professionals and goes over their pros and cons so you can make the right choice for you.

    Tax Attorney Definition

    A tax attorney is a trained, qualified, and licensed expert specializing in tax law and the particulars of the IRS tax code. Tax attorneys offer advice and deal with complex tax issues on your behalf. They can file lawsuits against the IRS and defend clients when accused of things like tax evasion. These professionals can also prepare tax returns and represent you on various tax-related issues like appeals, audits, collections, and payment plans.

    Enrolled Agent Definition

    An enrolled agent is a tax advisor federally licensed to represent you before the IRS or a state tax agency. They help solve issues like IRS audits, appeals, and collections. These experts can file tax returns for individuals, corporations, partnerships, trusts, estates, and other entities. Enrolled agents must have passed a comprehensive tax exam administered by the IRS. These agents may also get certification through their five years of experience as IRS employees.

    Pros of Hiring a Tax Attorney

    Hiring an experienced tax attorney to handle your tax issues, like missing a deadline, is wise. These experts protect your interests and are powerful negotiators who can help you avoid prison time or hefty penalties if you face tax problems. Before you opt to work with a tax professional, consider the following benefits:

    Save Time and Money

    The average person may spend many hours on tax preparation, which includes checking mistakes and figuring deductions. An experienced tax attorney can often handle such tasks faster and more efficiently.

    Legal Advice and Support

    Qualified tax attorneys have extensive knowledge and experience in tax laws and regulations and can offer valuable advice whenever you face a complex tax issue. They leverage their expertise to solve tax-related problems more effectively and meet your exact needs.

     Avoid Mistakes

    The best tax professionals pair their expertise with an attention to detail to avoid costly mistakes and penalties. They keep your taxes and records accurate, up-to-date, and compliant with IRS requirements.

    Having an experienced tax attorney to represent you when facing an IRS audit or other legal proceedings is beneficial. They can help you understand the legal process, offer advice, and gather evidence to protect your rights.

    Cons of Hiring a Tax Attorney

    Hiring a tax attorney may come with a few disadvantages, depending on your situation. You’ll want to be aware of these potential downsides before deciding if you want to work with a tax attorney vs enrolled agent. Some of these cons include the following:

    Expensive Rates

    Some people don’t work with tax attorneys due to the higher fees, which are influenced by their strict qualifications. The good news is that rates vary and you may be able to find experienced tax lawyers who work with your budget.

    Missed Learning Opportunities

    Hiring an attorney means you may not get the chance to learn tax codes, which could help you stay informed on your financial situation. That’s not always the case, however, as many tax lawyers advise, guide, and work with you every step. 

    Planning Is Required

    Finding a good tax attorney during tax season can be challenging, as most of them are busy. Plan ahead whenever possible if you think you’ll want to hire a tax lawyer.

    Partnering with a qualified tax attorney works best when you prepare on your end, from researching the right person to work with to having your tax records in order. Look for an experienced attorney who involves you through each step.

    Pros of Hiring an Enrolled Agent

    Enrolled agents can also help you with various tax issues, from tax planning and return filing to representation before the IRS. Here are the key pros of hiring an enrolled agent:

    Highly Versatile

    Enrolled agents offer a great way to file your returns and meet your tax needs in more than one location. Their licenses allow them to have the jurisdiction to operate in any state.

    Specialized Expertise

    Enrolled agents have either worked with the IRS for five years or have passed a comprehensive test. The test covers corporate and individual taxes and ethics, so they are knowledgeable in handling complex federal tax codes.

    Competitive Fees

    Enrolled agents have extensive tax-specific experience, but they often have lower costs. This allows them to provide you with more services at lower prices than many other tax experts.

    Choosing an enrolled agent offers you and your business many benefits. You work with an experienced tax preparer, a qualified representative for IRS-related issues, and a competent tax advisor.

    Cons of Hiring an Enrolled Agent

    The main disadvantage of hiring an enrolled agent is that they typically have less legal expertise than a tax attorney. The right fit for you depends on your specific tax situation, however.

    Tax Attorney vs Enrolled Agent: Differences

    Tax attorneys and enrolled agents have a lot in common. They can both help solve various issues and advise on tax matters. They do, however, have a few differences. Here’s what they are. 

    Qualifications

    Tax attorneys have completed law studies and passed a state bar exam. They take continuing education hours yearly to maintain their legal license and widen their expertise.

    In contrast, enrolled agents don’t have minimum educational requirements. They must only pass a comprehensive IRS test or have five years of experience working with the IRS. The IRS requires enrolled agents to take continuing education courses for at least 72 hours every three years to maintain their knowledge of current tax issues and laws.

    Attorney-Client Privilege

    Tax attorneys provide attorney-client privilege. This limits sharing of confidential information about criminal cases like tax evasion and protects your privacy. The IRS limits such privileges to only non-criminal cases for enrolled agents and their clients. 

    Services 

    A tax lawyer is a go-to solution for people facing a tax problem that requires legal representation. Attorneys can negotiate and represent you in court. An enrolled agent is ideal for solving tax-related matters that don’t involve the court. They plan, prepare, and file returns but can’t offer legal representation in court.

    Who you choose depends on the complexity of your tax issues and distinct needs. Consider how complex your issue is and whether you need, or expect to need, legal representation. 

    Work With Experienced Tax Attorneys

    Tax attorneys have exceptional educational background and legal qualifications and can provide you with more specialized and complex services than enrolled agents. The attorneys at Silver Tax Group offer comprehensive services, such as accounting and tax consulting, audit defense, criminal tax defense, IRS defense, and handling unfiled tax returns. Contact us to speak to a tax expert today and find out how we can help solve your tax problems.

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