When and Why to Hire a Tax Lawyer

Taxes can be very hard to understand, and even when they aren’t difficult, keeping track of everything can be tedious and boring to a lot of people. Some people have less of a problem than others, and many go on to earn their CPA and serve clients as a tax accountant. For help keeping up with personal records, working with an accountant can be helpful, but there are times when a little more expertise is preferable.

Tax Setup and Preparation

The best way to deal with tax problems is to be prepared in the first place, and one group who often are not prepared are small business owners. Often, they try to stick to a tight budget because every penny counts, and they try to figure out their taxes by themselves. Setting up taxes for a business isn’t exactly a simple process. If business is conducted in multiple locations, it may be necessary to apply different tax rates. Even more tax rules are involved if you conduct business in another country. There are also differences between different types of companies, such as a sole proprietor, an LLC, or a nonprofit organization.

Those who have others work for them need to make the distinction between who is considered an employee and who is an independent contractor. In many instances, the difference can be very subtle, but the responsibility of a business owner can vary a lot depending on the nature of the working relationship. There also many things that can be considered business expenses that a small business can write off to reduce their overall tax bill, a tax attorney can help distinguish these too.

Besides tax issues related to running a business, a tax lawyer can come in handy any time there is a disagreement between you and the IRS, such as a dispute in how your taxes are calculated. Estate plan taxes and tax returns are also more complex and can benefit from a tax lawyer’s skill and experience. Basically, any time a tax issue comes up that is confusing, or might be construed as fraudulent, getting help is wise.

Tax Defense Against the IRS

Getting a large bill from the IRS that you can’t afford can be very intimidating, especially when you try and tackle the problem alone. Even when you believe you’ve done everything right, but have been picked for an audit, it can be bothersome.

While IRS representatives aren’t “out to get you,” there is a bigger chance that they will look through your tax related activity a little closer if you try to represent yourself rather than hiring an attorney. In some ways, this is understandable, because the average person is more likely to make errors in interpreting tax law and how it applies to their situation than a tax attorney who has received, and continues to receive, extensive training on the various provisions of the tax code.

While accountants have tax training as well, an attorney is often a better choice, and it turns out that most people are better off hiring the attorney sooner rather than later, those who wait too long wind up needing damage control to correct their own mistakes, which is more expensive and time consuming.

When there’s more at stake, a tax attorney is best. A lawyer can provide a level of confidentiality that an accountant can’t, due to the attorney client privilege, while the knowledge of a CPA can be used against you.

At Wright Probate we help clients deal with various tax related issues, help them make sure they are following the tax code, and assist them in handling any issues they have with the IRS. If you have problems or worries about tax issues, contact Wright Probate to set up a consultation.