Whether you hire a tax attorney, certified public accountant (CPA), or enrolled agent to help you with your tax needs depends on your specific situation.
Tax attorneys specialize in the all of the small details associated with the IRS tax code. They can provide guidance on difficult legal issues, particularly in the areas of trusts, estate planning, tax disputes, and business tax law. Attorneys are powerful negotiators who can analyze the facts of a case in light of the law and construct arguments that best support a desired position. Their extreme knowledge of the court system provides them with leverage for resolving tax cases.
Some tax attorneys will help you prepare your tax returns for a premium; however, tax attorneys are not accountants and usually will not file your taxes with the IRS, you will still need to do that on your own. Tax attorneys usually do not have as much knowledge about maximizing deductions and planning ahead for future tax years as accountants do.
Here are some instances where you might need a tax attorney:
- You are starting a business and need legal advice about the structure and tax treatment of your company.
- You are dealing with international business and need assistance with contracts, tax treatment, and other legal matters.
- You plan to bring a suit against the IRS.
- The IRS has issued a criminal investigation against you.
- You have committed a tax crime and need the protection of attorney-client privilege.
If your tax issue is likely to reach tax court, or if you have been charged with a tax related crime, a tax attorney is your best option. Unlike other tax professions, tax attorneys maintain attorney-client privilege and so cannot be forced to provide information to third parties or to testify against you.
Certified public accountants (CPA) are experienced in maintaining business and financial records. They can also assist with preparing your taxes, ensuring you are in compliance with the tax code, and filing or correcting your tax returns. They can also represent you in front of the IRS. CPAs can provide financial planning, and are a good resource for those a comprehensive tax strategy that encompasses both personal and professional financial issues.
Enrolled agents specialize in tax issues, and receive their certification by passing a comprehensive examination which covers all aspects of the tax code. They can also receive their certification if they work with the IRS for five years in a position which regularly interpreted and applied the tax code and its regulations. Enrolled agents represent taxpayers during IRS collections, audit investigations, offers in compromise, and reducing penalties. If you are facing an audit and believe you are not guilty of a tax crime, or if you just neglected to file a required form, then an enrolled agent is good option for you.