Learn When to Hire a Tax Lawyer

What exactly does a tax attorney do?

Depending on the tax attorney’s area of expertise, he or she may be able to provide a variety of services. Tax attorneys can guide clients through complex tax processes, monitor tax legislation changes, assist in deal strategizing and structuring, and provide advise and assistance to clients facing tax concerns or fines.

 

A tax attorney may offer the following services:

  • Assist customers in filing their taxes, taking advantage of tax credits and filing alternatives that may save them or their business money.
  • Inform clients about pending tax legislation and how it may affect them (or their business)
  • Assist clients in creating a tax-advantaged estate plan.
  • Facilitate transactions such as the formation and management of a REIT (real estate investment trust) or the formation of a mutual fund.
  • Represent and counsel clients who are facing an audit, investigation, IRS penalties, wage garnishment, or litigation as a result of overdue taxes or errors.
  • Communicate with the IRS on behalf of their client

Many of the same things are done by a tax attorney and a certified public accountant (CPA), but the attorney has also passed the bar exam and is a licensed lawyer. Tax attorneys often have a more in-depth understanding of tax rules, regulations, and liabilities.

Should I hire a tax lawyer?

If you have a complicated tax position, owe past taxes, are facing tax-related litigation or criminal charges, or want to arrange a business or estate to minimize its tax impact, hiring a tax attorney may be a good idea. While a CPA can handle many of these duties, a tax attorney may be a better option in some cases. If you have an outstanding IRS tax liability, Unpaid tax liability, whether owing to unfiled taxes or errors in previous forms, can be intimidating and frightening.

If the balance is not paid by a specific deadline, the IRS may garnish your salary, place a lien on your house, or freeze certain assets. If you do not pay your loan on time, you may face criminal prosecution.

 

As a result, outstanding tax debt is a compelling cause to consult with a tax relief attorney. Not only can the right tax lawyer interact with the IRS on your behalf, but they can also represent you in negotiating a settled debt balance (an Offer in Compromise) with the IRS for less than you currently owe.