CPA vs. Tax Attorney: What's the Difference?


CPA vs tax attorney

Tax season can be a difficult time for individuals and businesses. Whether this is your first year filing complex taxes or you’ve let years of tax debts add up, help is available. There are a few different options when it comes to entrusting a professional with your tax case. Two of the most popular options are certified public accountants (CPAs) and tax attorneys. Knowing which is right for you comes down to your unique needs and goals, as well as the status of your case with the Internal Revenue Service (IRS). Tax debt is no small matter. Protect yourself with the correct tax professional for your situation.

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What Is a Certified Public Accountant?

CPAs have five-year business degrees under their belts, with at least 150 hours of education. They also passed the intensive CPA exam and continue to complete at least 120 hours of continuing education every three years. A CPA is not the person you’d see at your average tax preparation chain, such as H&R Block or Liberty Tax. These are employees who have undergone about 60 to 80 hours of training. A CPA is much more knowledgeable and experienced in tax preparation.

You might need to hire a CPA to do your taxes if you have complicated tax situations. For example, if you own a business, are divorced, have children, and have investments with high net worth, you’ll want to spend the extra money on a CPA to prepare your taxes. The more money you have coming in and out, the more a CPA can benefit you during tax season. CPAs know how to abide by federal laws while still minimizing your tax liability and maximizing benefits.

If you want to develop an ongoing relationship with a tax professional, hire a CPA. Finding a CPA you trust can mean returning to the same professional year after year for a simpler tax process. A CPA can come up with a long-term tax plan and help you stick to it, as well as help with monthly and annual accounting services. Paying quarterly taxes, creating a financial plan, and undergoing audits are easiest with a CPA by your side.

What Is a Tax Attorney?

A tax attorney is completely different than a CPA, although both help taxpayers. Tax attorneys are legal professionals with law degrees. They have passed the state bar exam and specialize in the legal side of tax preparation. While both CPAs and tax attorneys can represent your best interests in communications with the IRS, a tax attorney is generally the better choice if you’re involved in trouble with tax authorities, such as owing thousands in back taxes or facing liens and levies.

A tax attorney is a type of lawyer who specializes in tax law. These professionals are uniquely equipped to handle legal tax matters, such as settling back taxes, helping with unfiled returns, halting wage garnishment, undoing property liens and account levies, and coming up with compromises with the IRS. When a taxpayer is in trouble, he or she should go to a tax attorney for assistance, not a tax preparer.

There are many types of tax attorneys to choose from according to the type of tax help required. Someone experiencing problems with trusts and estates, for example, might need a tax lawyer who specializes in these fields. One thing most tax attorneys have in common, however, is expertise in tax controversy and dispute resolution. Tax lawyers have undergone years of education and training to go up against the IRS and other parties in the face of adverse tax actions and can represent clients during IRS proceedings.

Choosing the Right Type of Tax Assistance for You

If you’re on the fence about whether to hire a CPA or a tax attorney, consider the tax matter at hand. Do you have to muddle through complex personal or business taxes and want to minimize tax liability? Go with a CPA. Are you in trouble with the IRS, receiving debt collection notices, or involved in a tax controversy matter? Hire a tax attorney. If you need an attorney, don’t hire a CPA to save money. You’ll only end up getting into deeper trouble with the IRS – something that could end in much more costly losses than paying for a tax attorney.

You might need to retain a tax attorney if you’re in a complex case involving tax agents or revenue officers. If the IRS has assigned a revenue officer to your case, it means you’re very close to receiving a levy on your bank accounts or wages. In these cases, confide in a tax lawyer to protect your rights and advise you on how to stay out of trouble. Legal representation can be paramount in negotiations and discussions with the IRS if you owe taxes or if you’re facing allegations of tax fraud. If you have a serious tax problem, go to a tax attorney, not a CPA.

Another way tax lawyers are helpful is with tax planning. If you need someone to come up with a tax plan that minimizes your liability, trust an attorney to structure your assets. An attorney has undergone more training in dispute resolution than the average CPA. If you only need basic tax preparation and aren’t in trouble with the IRS, consider a CPA or even an enrolled agent (EA). An EA is like a CPA, except that an EA doesn’t have to have as much experience or training. EAs typically cost the least out of EAs, CPAs, and attorneys. Just remember – an EA or CPA might not be helpful if you’re involved in a tax dispute.


Prevention VS Intervention

Both CPAs and tax lawyers can help with tax planning, financial decisions, and minimizing tax penalties. CPAs might have more expertise on the financial side of tax prep, while an attorney can provide legal advice in the face of adversity or possible problems. If you need representation in a tax defense case, trust an attorney. An attorney can also work with you to solve cases involving major tax debt and other difficult problems. If you aren’t sure whether to hire a CPA or a tax attorney, schedule a free consultation with Top Tax Defenders to find out. A lawyer will speak with you at no cost or obligation, review your case, and give you honest advice on whether you should retain a tax attorney.

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