When you find yourself amidst the chaos of tax problems, getting the right help is absolutely essential! In fact, the supposedly simple task of completing a return can be so stressful for people that they put it off, and get into even more difficulty. Although, that can seem like a drop in the ocean to those that encounter problems with the law!
The good news is that there are professionals out there that can help you if you are having problems with your tax. Unfortunately, there is often a great deal of confusion as to where the right help for your issues should come from. That is, whether you need to request assistance from A Certified Public Accountant (CPA) or a qualified tax attorney. To make your decision even more complicated, there are even some tax attorneys that are also CPAs!
The good news is that to help you make the right choice, you will find a detailed outline of what each type of tax specialist does. You will also discover in what situations is best to call on their help. Keep reading to learn more.
What is a Tax Attorney?
A tax attorney differs from a CPA in several ways. The first is that they are a qualified legal specialist that focuses on issues of tax. That means they have passed the state bar exam. While also being trained to mediate in a situation between you and the authorities like the IRS. In fact, the onus really is on the legal aspect of their role here. The reason is that tax lawyers are who you need to contact if you are in trouble with the law. In situations such as owing back taxes or levies.
Unfortunately, this can make tax attorneys seem little more intimidating to work with than CPAs because their presence is seen to signify something more serious. However, it is wise to remember that a tax attorney can help with a variety of issues, including assisting you in avoiding legal issues in the future.
Of course, they are also perfect places to deal with an issue that you have already encountered concerning the legalities of the tax system. In fact, engaging a good tax attorney can literally mean you end up saving thousands of dollars in some cases. After all, it is they that have the skill and the intimate knowledge of tax law that will enable them to successfully argue your case.
Also, within the field of tax law, different attorneys will have even more specialized areas. For example, some will have extensive expertise in dealing with property and estate tax issues. While others may specialize in personal tax cases or those that arise from small businesses.
Therefore, to give you the best chance of a successful outcome, finding a tax attorney that has experience in the sector that you need help with is the best idea. Although no matter their field of expertise, you will find that all tax attorneys are adept at resolving disputes.
What is a CPA?
It is vital to note that a CPA is quite different from a tax attorney. In fact, they are much more focused on the correct preparation and provision of your tax. While tax attorneys lean more towards helping you straighten out problems that have already occurred.
That isn’t to say that a tax attorney is any better or worse than a CPA in the objective sense. After all, CPAs are also highly qualified individuals that have 5 years of college education. In fact, their training and experience doesn’t even stop there. This is because to become a CPA, there is also a notoriously tricky exam to pass. Then there is the continued commitment to education through their career that they have. Something that requires 120 hours of CPD every three years for them to maintain their qualification.
In particular, the scope of a CPA will cover issues such as completing your tax returns if you find yourself in a complicated final position. Of course, complication positions will vary between individuals. Still, some good examples are those that have their own company and people that own a substantial amount of property. Even people with family situations such as divorce and dependents can benefit from a CPA’s help when doing their returns. In fact, all these things can significantly affect your tax return, making it much more complicated and confusing to complete correctly.
Happily, a CPA is a professional that can help in such situations. This is because their vast knowledge of the federal tax laws enable them to correctly complete your tax return. While also making sure you are not overpaying and losing valuable money from your assets.
Finally, there are some other essential things that you need to know about CPA before you choose to work with one when completing your tax return. The first is that you can engage one person to help you over the long term. Something that means they can devise a long term tax strategy that will help to maximize your tax benefits.
Additionally, you are not going to find a CPA at a typical high street tax prep office. Instead, you will need to seek out a qualified CPA, especially.
Dual qualified tax attorney with CPA status
What many people don’t realize is that in some cases, you can engage the service of a CPA that is also a qualified tax attorney. Of course, doing so means you will get the best of both worlds. That is the legal knowledge to help get you out of trouble with the IRS, and the accountancy smarts. Skills that can prevent you from having any more problems in the future.
However, as you would expect from an individual with so many qualifications, education, to their name, a dual qualified tax attorney with CPA will not be cheap to hire.
In fact, you can expect them to be the most expensive choice on offer. Therefore, unless you are in a unique situation that requires such expertise from a single person, it may be better to choose a professional qualified in one or another of these fields.
Do I need a CPA or a tax attorney?
This brings us to the matter of how to decide if you need a CPA or a tax lawyer. A decision can cause a considerable headache to many. Happily, some specific examples can help you determine whether you need a CPA or the servers of a fully qualified tax lawyer.
Reasons to contact a CPA:
As a general rule to remember when you are making this decision is that CPAs are more focused on the financial part of preparing tax returns. Therefore it’s wise to hire a CPA if you find your business or personal tax forms confusing and complicated.
Reasons to contact a tax attorney:
However, as a tax attorney remote is far more comprehensive, they can help you with a broader range of issues.
Issues with estate inheritance
The first of these situations is if you have a high-value estate that you plan to pass on to someone else after your death. In fact, a tax lawyer can be especially helpful here. This is because they can advise you on legal tactics that will prevent your heirs from paying out a vast amount in taxes.
Sadly, such a high tax payout is often the case when dealing with inheritance. The reason for this is that estates worth over a certain amount are liable for tax of us to 40%.
Preparation of tax strategy
It’s not just CPAs that are good with tax planning and preparation but tax lawyers too. For example, in a situation where you are looking to prevent tax losses on your assets, a qualified tax attorney can be the best person to call on. The reason for this is because of their expertise in resolving such disputes.
Additionally, if you are looking to steer clear of any issue with the IRS and the law, engaging a tax attorney can be beneficial. Just be sure to ask them for help in the planning stages of devising your tax strategy.
When you run your own business
Whether you already run or are considering starting up your own business, a tax lawyer is a professional that could be a great deal of use to you. This is because they can advise you on many different aspects of your business that will impact on your tax.
For example, if you choose to incorporate your business, you will be classed in a different tax bracket if you did not do this.
Other issues that a tax attorney may be able to help business owners include wage garnishment and legal contracts, among many others.
You run into trouble with the law regarding your tax
Finally, one of the most significant ways a tax attorney can help you is if you have the IRS knocking at your door. Something they tend to do if you have tax debts to be paid, or are querying your tax payments.
Additionally, you may find yourself in the uncomfortable position of being accused of a tax-related crime like fraud. Fortunately, the expertise of a tax attorney can make all the difference to your case.
Also, if you have or are close to having a levy on your wages or accounts, a tax account is definitely the person that can help. In fact, they may be the only thing standing between you and an infringement of your rights.
A word of warning here. When it comes to tax, money is critical, and that can often mean that the cheapest option will seem more appealing when looking for help with your issue.
Of course, this can make working with a CPA more appealing, too, as they tend to the cheaper of the options.
However, if you do find yourself coming up against the law, the only person that can help you is a quality tax lawyer. Something that means they are worth the extra investment involved.
How to choose the right tax attorney
Now you understand the difference between the situations where you would need the services of a CPA and a tax lawyer, we can move onto other vital elements of the selection process.
The first of these is that you need to check any tax attorney qualifications. In particular, make sure that they hold a J.D or Juris Doctor degree, and that they have passed the state bar exam. Also, some tax lawyers may have a specialized master’s degree known as an LL.M. A qualification that focuses specifically on the legal aspects of taxation and will ensure your attorney is very well qualified to assist you.
Next, before you choose a tax attorney, it can be advantageous to ensure they have the necessary experience in the area that you are struggling with. With that in mind, asking them what area of tax their specialist lies in is a smart choice.
Don’t be discouraged if the tax attorney you approach isn’t an expert in the field you require, though, as they may be able to refer you to one that is. Often within the same practice.
Then there is the more practical and pragmatic issue of your partnership with a tax lawyer to consider. The amount they charge for their services being the most obvious. Be sure to check whether they offer any free services like tax clinics or legal aid to those that are struggling with money too.
In summary, if you are dealing with a more simple tax return, and have no issues with the IRS, a CPA would be sufficient. However, a tax attorney is a more appropriate choice if your problem falls into the more complex category. Such as issues with estate inheritance, or starting or running your own business.
Additionally, if you find yourself in a particularly complicated situation, or are already dealing with trouble from the IRS, a qualified tax attorney is the person to call.