When Does it Make Sense to Hire a Tax Attorney?
Both an accountant and tax attorney can help you in a time of need, but an attorney helps when you are fighting the law. Tax attorneys are lawyers who concentrate on the complex and technical field of tax law. They are best for handling legal issues associated with your tax situation.
There may be a point in time when you have fallen behind on taxes and now are dealing with the IRS for collections. A tax attorney will come into play when there is a legal issue regarding your taxes.
When Would You Hire Tax Attorney?
The IRS does not only deal with personal tax returns. Estates and businesses must file tax returns, as well. You might need a tax attorney for one of the following circumstances:
- You are anticipating a taxable estate when you die – If you believe that your estate value is going to exceed $5.6 million, a tax attorney can help devise an estate-plan of strategies to help stay below the exemption threshold and avoid vast amounts of your estate going to taxes.
- You are starting a new business – Any business type you’ve selected to start will have tax ramifications. A tax lawyer can advise you about structuring and tax treatment of your company, including non-tax issues you might not have known about.
- You are involved in international business – If you are involved in international trade, you will require a tax attorney to help with contracts, tax treatments, and other legal matters.
- You are planning to bring a claim against the IRS – If the IRS has brought a suit up against you and you are under criminal investigation, you will want to see a tax attorney to help with reviewing your case before the U.S. Tax Court.
If you are ever faced with one of the following situations, it will make sense to seek out a tax attorney:
- The IRS is conducting an Audit on you – If the IRS is auditing you, you may need proper representation. A tax attorney in this situation will help you negotiate a settlement with the IRS, and they can help settle your debt for less.
- The IRS is pursuing you with criminal charges – You are in a dangerous situation if the IRS is trying to pursue you for criminal charges. You can not handle this on your own. The last thing you want to do is end up in prison, or hit with significant fines. Your tax attorney can help you downgrade your punishment.
- You require someone to communicate on your behalf – If you need someone to speak for your behalf with the IRS, a tax attorney can help you in this situation. You would need to sign a power of attorney, and then your attorney can communicate and act on your behalf openly with the IRS.
- Getting a notice of a balance due – A CP notice is a letter from the IRS that states there is a balance owing. If you are unsure about a CP Notice that you have received or worried about it becoming a more significant issue, consulting a tax attorney is always a good idea.
If you discover yourself in any of the above circumstances, you probably will need to hire a tax attorney to help. Instead of waiting, and letting a situation get potentially worse, contact a professional attorney, such as Michigan tax attorney to help you figure out your next steps.
Questions for a Tax Attorney
When meeting a prospective tax attorney, there are a few questions you should ask, such as:
- Has the attorney been admitted to the state bar?
- What is the attorney’s specialty?
- What does the attorney charge?
- If the attorney can’t help you, can they refer you to another attorney who has dealt with your situation?
An attorney and anything you say to them is typically privileged information, meaning the lawyer is under no legal obligation to or duty to divulge information to the court.