When to Hire a Tax Attorney

Knowing why tax attorneys are used helps to determine when one should utilize their services. Tax attorneys specialize in tax laws, which are inherently diverse, dynamic and detailed . There are even some specializations within the field – as some tax attorneys specialize in estate tax, for example. Tax issues can be one for tax preparers, accountants and attorneys, depending on their nature and complexity. While some tax attorneys might be CPAs or have a background in tax accounting, tax attorneys are primarily needed for legal representation or advice on complex issues with tax implications.

♦ When there is a taxable estate

Estate tax can be a complicated issue, particularly with changing estate tax laws, future implications and myriad tax deduction strategies. The size of an estate can compound the complexity of the tax problem. Estate tax attorneys are better qualified to help, either on their own or in conjunction with a CPA. Apart from advice on estate planning, they can offer legal representation if a person needs to file an estate tax return.

♦ When confidentiality is required

CPAs and tax preparers should not disclose your affairs as a matter of professional ethics. However, if they are forced to testify against a client, they would be required to reveal information to which they were privy. Particularly if a person is under criminal investigation in a tax matter or committed tax fraud, a tax attorney is better positioned to help. With a tax attorney, there is complete non-disclosure, since lawyers have a different code from accountants.

♦ For legal representation in a tax issue

For businesses or individuals, a tax attorney is not only useful for advice, but necessary for representation. Facing a criminal investigation by the IRS or bringing a suit against them, for example, requires specialist legal representation, which the tax attorney provides. Most legal matters with tax implications require the counsel of a tax attorney.

♦ For setting up business arrangements

Regardless of the size of the business, issues with income tax and corporation tax need to be addressed and documented. The self-employed might face tax troubles because the nature of self-employment puts them under the microscope and private-versus-business interests are difficult to separate. The larger and more complex a business is, the greater the need for a qualified and competent tax attorney.

Tax attorneys can give comprehensive advice on options and loopholes that an accountant would not be able to. Often, businesses use the services of accountants and attorneys for their tax issues. Perhaps the greatest benefit of having a tax attorney is not only to solve tax problems when they arise, but to prevent them from occurring in the first place.