Tax Attorney/Lawyer Benefits for State and IRS Taxes
Need a Tax Attorney?
Tax attorneys can help with many complex tax issues just like a CPA or an Enrolled agent can provide tax relief. Using a tax attorney for help with certain tax issues has it’s benefits. It is best to use a tax attorney when there is either a large sum of money involved, the IRS is accusing you of criminal tax fraud or you are heading to court for a tax related issue. Some benefits of using a tax attorney are listed below.
Tax lawyers are the highest level of tax professional that you can hire. Typically a tax lawyer helps with more advanced, technical, and legal related tax issues and problems. These types of tax professionals tend to be pretty well rounded and extremely helpful in handling various tax situations that other tax professionals cannot. Generally, tax lawyers are not accountants and are not involved with in the process of filing taxes. They will have knowledge of tax filings, but will not have the knowledge of the correct tax deductions and proper tax planning needed for yourself or your business.
Tax relief lawyers should be consulted with after it is determined that a tax problem exists. A tax lawyer is a great resource to have when you want someone else to handling IRS dealings and negotiations with the IRS. A tax lawyer can represent you before the IRS and even represent you in tax court through IRS power of attorney. Below are some of the benefits to hiring a tax lawyer to help you with your tax problem and represent you before the IRS.
Tax Lawyer Benefits
Privileged Communications: You can be assured that anything you disclose to your tax lawyer or their staff, it will stay confidential. A tax lawyer will never be able to be forced to disclose information that you have provided them. When working with a tax lawyer they will only disclose the information that is required in order to resolve your tax problem.
Negotiating Skills: Tax lawyers are known for their negotiating skills. These skills come in handy even when negotiating with the IRS. When it comes to dealing with IRS tax problems there is much negotiation that can be done. Two people with the exact same tax problem and financial situation can both achieve significantly different outcomes depending upon the angle taken with the IRS. Choosing a good tax lawyer can ensure that a manageable solution is negotiated on your behalf.
No Tie to the tax problem/taxes owed: Tax lawyers know IRS hardball tactics and they are not phased at all. They know what moves the IRS is going to take and they understand the harshness of their requests. Since a tax lawyer does not have an emotional attachment to the tax problem they can typically handle the situation in a cooler and more professional manner than you would be able to.
Highly Educated: All tax lawyers are required to be licensed by their state bars. As a tax lawyer continues to practice they must continue legal education to remain up to date in their profession and they are required by law to be honest in their legal communications.
When to Hire a Tax Lawyer
The benefits of a tax lawyer come in handy when dealing with certain topics and problems with the IRS. Below are some of the common topics and problems you should consider hiring a tax lawyer.
- Owe Taxes & Cannot Pay: Typically if an individual cannot pay their taxes the IRS will suggest entering into an installment agreement and paying overtime until the taxes are paid in full. Sometimes it isn’t as simple as just entering into a payment plan and making monthly payments. What if you don’t have enough income to pay the monthly payments? Or what if paying the IRS will leave you with little to pay your other expenses? There are many other options available, most of these options need to be negotiated with the IRS. Tax lawyers are knowledgeable in IRS code and understand how the many relief programs work. Tax lawyers are also financially knowledgeable in other advanced financial solutions. With the combination of knowing about the IRS and advanced financial solutions, a tax lawyer will likely be able to find the best solution for your unique financial and tax standing.
- Unfiled Tax Returns: Having a few years of unfiled returns when you don’t owe money is not that big of a deal. It is another story when tax returns go unfiled and money is owed to the IRS. The IRS will charge steep penalties on unfiled/unpaid taxes and will take harsh collection actions against individuals that have not filed/have not paid. Consulting with a tax lawyer when dealing with unfiled tax returns can be a good idea since they will have the knowledge needed to limit IRS actions, possibly reduce the amount of penalties owed to the IRS, and also possibly reduce the amount of taxes you owe to the IRS.
- Going to Tax Court: One of the benefits of using a tax lawyer over other types of tax professionals is being able to have them represent you in court. Hiring a tax lawyer when going to tax court is a good idea since you get the benefits of the “tax lawyer client privilege”, special tax law training, and superior negotiating skills.
- Dealing With Tax Fraud: Many times tax fraud cases can get messy. Committing tax fraud is against the law and the IRS is known for taking some harsh actions to go against individuals that have committed fraud. If you have been accused of tax fraud, even if you are at fault, a tax lawyer is the best type of tax professional to have on your side. The privileged communications between your tax lawyer and you will ensure the only information disclosed to the IRS will be the information needed to take care of your case and get the tax fraud case behind you.
Questions to Ask Before Hiring a Tax Lawyer
Tax lawyers have a variety of backgrounds and it is important to find one with the appropriate knowledge in order to get the help that you need. The tax lawyer should also have questions for you as well to determine if you would be a good fit for their services. If a tax lawyer doesn’t have questions to ask and will take you on as a client right away, be skeptical, there is no such thing as a once size fits all tax lawyer. Below are some questions to ask before hiring a tax lawyer.
- What tax areas do you specialize in?
- How much do you charge?
- Do you charge a retainer fee? (If so, be skeptical, their services should justify their value and should not be charged upfront)
- Can you help with my tax/financial situation? If not, do you know of another lawyer that can help?
- How long will it take to complete my case?
- How long have you been in the business of resolving tax problems?
- What is your success rate in resolving tax cases? (Good question, especially if they think they can get you an offer in compromise or some sort of tax negotiation)
- Have you handled other clients with cases similar to mine?
Once you have determined that your situation deserves the attention of a tax lawyer then start the process of finding the right one for your unique situation. It is important to watch out for those tax lawyers that will tell you anything you want to hear just to get your business. Tax lawyer’s skills will not fit everyone’s needs. Make sure the tax lawyer is asking the right kind of questions as well prior to hiring them. They must be looking for an individual that fits their skill set and that they truly believe they can help.
If you would like to speak with a company that has tax lawyers on staff to help with tax problems, please request a free tax analysis. We have partnered with trusted tax professionals that provide a wide array of tax solutions to taxpayers with tax problems.
IRS Tax Attorney Client Privilege
Some claim that this is the most important reason for using a tax attorney. This has to do with confidentiality (attorney-client privilege). Tax attorneys are the only type of tax professional that are legally exempt from being forced to testify against you in a criminal case if the IRS were to testify against you in the future. Other types of tax professionals such as a tax professional or CPA can be forced to testify against you. There is some confidentiality with other tax professionals, but it does not apply to criminal cases. If you have been accused of fraud, it is best to hire a tax attorney for this reason.
May Offer Legal Analysis That Other Professionals Won’t
A tax attorney can give you other options that a CPA or enrolled agent most likely would not give you. Sometimes, based on your situation, these options could be the best option for you. For example, a tax attorney could recommend tax bankruptcy or other legal options that a CPA or enrolled agent are not fully competent in dealing with.
Generally speaking, tax attorneys have better skilled in negotiation than other types of tax professionals. Depending on the type of tax problem you have, it may require a significant amount of negotiation and having a tax attorney on your side for this can be a big plus.
Like CPAs and enrolled agents, a tax attorney is a type of tax professional that can legally represent you before the IRS. This means that the attorney can represent you in meetings with the IRS and can prepare and file written responses to the IRS on your behalf. So in essence, they handle the IRS so you don’t have to.
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