What Does a Tax Attorney Do Exactly?

Do you need a tax attorney or a CPA? 

Many people’s concern is, “What does a tax attorney do that a certified public accountant can’t?” While both can help you with tax needs, there’s a limit to the kind of help they can offer.

Thanks to online tax-filing systems, filing taxes has been simplified. However, these systems make it harder for you to realize how intricate the tax code is. 

You may require a tax attorney to help you get your refund check instead of an IRS audit notice in some situations.

So, what does a tax attorney do exactly? Here are five essential things a tax attorney can do for you.

  • They Will Help You Respond to IRS Collection Notices and Audits

If the federal government knocks on your door, you’ll require some assistance, especially if you owe the IRS some money. 

Handling interviews, notices, and other tools the IRS throws at you when collecting taxes can be quite an intimidating task.

If you receive a legal notice from the IRS, below are essential things to remember:

  • Never ignore any IRS notice
  • Spend some time with a tax expert, preferably a tax attorney, before going to IRS offices
  • You can’t be imprisoned if you’re unable to pay taxes
  • You have other options if you’re unable to pay the IRS
  • The IRS also makes mistakes

The IRS can commit a mistake when calculating how much you owe them. It’s hard for the IRS to track precisely how much you owe in taxes, especially when you are on a payment plan.

However, it takes a trained professional to realize the mistake, and that’s why you need a tax attorney to review your taxes. They will point out IRS errors while advocating on your behalf.

  • A Tax Attorney Will Work Hard to Keep You Out of Jail

There are serious penalties for individuals who fail to file their tax returns. These penalties also extend to people who fail to file on time or file inaccurate amounts.

Remember, you can’t be imprisoned if you’re unable to pay your taxes. However, you can go to jail if you try to cheat on your taxes. 

If you face jail time due to tax-related crimes, a tax attorney can help you stay out of jail. It’s the attorney’s job to help differentiate between a dishonest tax filing and an honest mistake.

Tax season is one of the most stressful times of the year for most Americans. The situation is even worse for those facing tax penalties. 

Unfortunately, the tax code is considered one of the most complex laws in the U.S. It’s therefore advisable to hire a tax attorney to help you manage your tax problems.

  • A Tax Attorney Will Help You Buy, Setup, and Sell Your Business

Different business structures have different tax obligations. While starting a business is quite challenging, it is even more complicated if you don’t understand the legal aspects of things.

The type of business you start will determine how the IRS will tax your business. Consulting a tax attorney before starting a business will help you understand how your business structure will affect your tax consequences, especially if you have investors or partners.

Buying and selling a business also has tax consequences. Your tax attorney will help you understand these consequences so you can make an informed decision.

  • They Help You Understand Confusing IRS Official Documents

There are over 2,000 IRS publications and forms. Most of these documents are incomprehensible to ordinary American citizens. Some of these publications contain information such as:

  • The rights you’re entitled to as a taxpayer
  • The IRS tax collection process
  • Information about tax collection of exempt organizations
  • Deductions for weight loss programs or dental expenses
  • How the IRS collects on tax debts

With over 2,000 IRS forms, it may take a trained eye to understand all this information. A tax attorney will guide you through the complicated tax procedures to ensure that you file the correct documents.

  • They Will Advise You on How to Lower Your Taxes

If you’re worried about being hit with a high tax bill?. A tax attorney can show you legal ways to lower your taxes. You can reduce your taxes by:

  • Earning a tax-free income
  • Contributing to a health flexible spending account
  • Maximizing your tax deductions and credits
  • Donating to a charity
  • Contributing to your 401K
  • Paying medical bills
  • Reducing your tax rate

Reducing your tax liability is one of the best decisions you can make to improve your finances. However, you’ll need to work with a tax lawyer who understands the best ways to reduce your tax liability.

Are Tax Attorneys Worth It?

Your specific tax situation will largely influence the decision to hire a tax attorney. If you’re facing potential legal problems such as jail time for tax fraud, you could benefit from hiring a tax lawyer. 

You could also get a tax attorney to help you sue the IRS.

It’s also advisable to hire a tax attorney if you are dealing with complicated business and personal tax problems. In cases where there may be a lot of money on the line, hiring a tax attorney will be worth it.

However, if you need help filing your personal taxes or have simple questions about the process, hiring a tax attorney may not be worth it. Instead, you should hire an accountant or a tax preparer who will charge you less than a tax attorney would.

For low-income taxpayers, there is free assistance on the internet.

What Does a Tax Attorney Do?

Are you ready to start dealing with your tax issues? Are you still asking yourself, “What does a tax attorney do?” This guide shows you why you need a tax attorney more than an accountant when dealing with tax issues.

The best tax attorney will know exactly how to help you if you’re accused of tax fraud. They will also give you tax tips on how to reduce your tax liability.

For more money-saving tips, read other articles on our blog.