When you have a complicated tax return to file or need professional guidance handling a complex tax issue, you may debate whether to contact a tax attorney or a certified public accountant. Your best choice may depend on the type of issue you have with your taxes and what kind of resolution you hope to achieve. You can decide which professional can offer you the best tax assistance by learning about the differences between a tax attorney and a CPA.
Tax Attorney Overview
A tax attorney is a lawyer who has been admitted to the state bar and knows the finer details of the current IRS tax codes. This attorney specializes in dispensing advice about a host of legal tax matters. Some of the more common areas that a tax lawyer can assist you with include:
- estate planning
- tax disputes
- business tax issues
Tax attorneys are trained to be assertive and proactive negotiators for their clients' best interests and are skilled in using the court system to resolve people's tax situations. They likewise are trained to analyze every detail of your tax case and build arguments based on those facts to support your claims in court or with the IRS.
However, tax lawyers are not trained in accounting and typically will not offer to prepare or amend your tax return. They likewise will avoid dispensing tips on how to find credits, exemptions, and deductions that you can claim as well as how to plan for future tax years.
Nonetheless, you may choose to hire a tax attorney to represent you if you are facing dilemmas like:
- starting a business and need legal counsel about structuring taxes
- involved in international business deals and need help with tax contracts or treatments
- facing IRS criminal charges
- planning to sue the IRS
- committed a tax crime and need attorney-client privileges
A tax attorney by law cannot divulge details of counsel provided to you and cannot be forced to testify against you in court.
Certified Public Accountant Overview
A CPA is a professional accountant who is trained to assist private taxpayers and business owners prepare and maintain tax and financial records. Some of the tasks that a CPA can help you with include:
- preparation and submission of returns
- tax code compliance
- amending returns
- filing past due returns
CPAs can represent you before the IRS and can provide counsel during audits and tax hearings or trials. They also are skilled in tax strategies that assist you in successfully dealing with personal and professional finance matters.
A CPA who has worked for the IRS for at least five years and has experience in interpreting and applying the IRS tax codes and regulations can take and pass an extensive test to become an enrolled agent. An enrolled agent or EA specializes in helping clients with more complex and in-depth tax matters.
Like a CPA, an EA can represent you during an audit. However, EAs are also trained to assist clients with filing required IRS forms that may be overlooked during the preparation of their returns. This oversight does not necessarily mean that the preparer or the taxpayer has committed a crime. Regardless, the filing of these required forms could change the amount of taxes that you owe to the federal government.
Taxpayers can seek counsel and assistance from tax attorneys or CPAs. Both are trained and experienced in helping private citizens and business owners resolve complicated tax issues. You can decide which professional can best assist you with your tax concern by learning how a tax attorney differs from a certified public accountant.