CPAs are a great resource for ensuring that you’re properly and accurately reporting all of your necessary tax information, as well as simplifying the filing process for you.
However, when it comes to serious tax issues, a CPA may not be the best choice. While CPAs are knowledgeable on tax law and can be a great resource during an IRS audit, they’re not prepared to handle serious tax litigation issues. As such, the decision of who you’ll need to work with to resolve your tax issues may be unclear. These guidelines should help clear up which professional you’ll need to bring in to protect yourself from the IRS.
When Hiring a CPA is the Right Choice
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.
When Hiring a Tax Attorney is the Right Choice
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.
or an Tax Attorney is That Tax Attorney's are Lawyers and are Granted Attorney-Client Privilege and a CPA Are Not.
Tax attorneys are also preferable as they can handle many kinds of difficult Tax Matters, including:
- IRS Tax Audits
- Back Taxes
- Unfiled Tax Returns
- Wage Garnishment
- Account Levies
- Property Liens
- Negotiating with the IRS
- Representation in Tax Court
- Representation in Court of Claims for Refunds
- Report previously Undeclared Income both Domestically & Offshore
- Voluntary Disclosure of Tax Fraud
- Criminal Tax Evasion
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 or if you need to deal with an International Tax issue, there are tax lawyers who only take on international tax cases.
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