Why Small Businesses Need IRS Tax Attorneys


tax attorney

When you own and operate your own business, you are expected to be in control of every last detail. This includes filing and paying your business's taxes on time without fail. 

However, when you find yourself overwhelmed by the task of paying your business's taxes, you may welcome help from an IRS tax attorney. This tax professional can assist small business owners like you in a number of crucial and timely tax-related matters.


Paying Taxes When They Come Due 

The most obvious benefit of hiring a tax attorney for your business involves telling you when and how to pay taxes as they come due. The amount and types of taxes you have to pay will depend on factors like the size and location of your business. In fact, you may even have to pay employee taxes on a quarterly basis even if you do not have any employees working for you. 

Regardless, your attorney can advise you on how to file and pay federal and state taxes as well as taxes that are charged by the city, county, or municipality where your business is located. He or she will also know what tax documents to use and file and what verification will need to be submitted along with your business's tax returns. 

Another perk that comes with hiring a tax attorney centers on knowing when to file and pay your taxes. You might owe them on a quarterly basis or the IRS may allow you to pay them annually. Your attorney will know what the deadlines for filing are and may help you obtain an extension if necessary. 

Avoiding Penalties and Interests 

Obtaining a tax filing extension for your business can be crucial if you want to avoid costly IRS penalties and interests on your tax debt. Failing to file on time or leaving out critical information on your tax returns could delay the processing of your taxes. You could in turn incur fines, penalties, and additional interest on what you already owe to the IRS. 

When you have an IRS tax attorney on retainer, you get the help you need with filing on time and submitting all of the information required to prove your income and expenses. Your attorney can also act as your liaison between the IRS and you. He or she can answer letters and phone calls from the IRS and handle any tax disputes that might arise and potentially end with you being fined or penalized. 

Determining the Best Type of Business Structure 

If your business is relatively new or is being reorganized, you might need to have it structured to your advantage. Deciding what business structure to use may confuse you. You may not even know what your options are. 

However, your tax attorney will know what business structures are available to you and what one works in your best interests. The most common business structure choices include: 

  • LLC
  • Corporation
  • Multiple-owner business
  • Single-owner business

The one that you choose for your business should reflect its function and design. It also should strategically work to your best interests when it comes to filing and paying your business's taxes. 

Handling Business Contracts 

An IRS tax attorney can be a valuable ally when it comes to handling business contracts. For instance, if you want to negotiate new contracts for your company, you might want your tax attorney to review them to make sure you avoid taking on undue expenses. 

Likewise, if you plan to renew contracts for your business, you also might want your tax attorney to look them over before you sign them. His or her assistance can help you avoid taking on a tax burden you cannot afford and cannot escape because of the legalities found in the contracts. 

The attorney's help can also come in useful if you plan on acquiring or selling a business. These transactions inevitably come with tax implications for you as the business owner. Your attorney can make sure your tax burden is as low as possible and that you avoid taking on a tax debt that legally belongs to the other party in the transaction. 


Tax Deductions and Exemptions 

As a business owner, you have the right to claim tax deductions and exemptions to which you are legally entitled. Even so, you might not be sure of what they are and how you can claim them on your tax return. 

Your tax lawyer can identify what exemptions and deductions you can claim and make sure they are utilized in a lawful way on your return. Some of the expenses you can deduct from your taxes include: 

  • Depreciation
  • Equipment purchases
  • Home office deductions
  • Company-related travel
  • Employee benefits

Your tax attorney likewise will make sure you do not claim expenses like: 

  • Traffic tickets
  • Home telephone line
  • Costs of business clothing unless it is a required uniform
  • Personal expenses
  • Expenses used to determine the cost of goods sold

These deductions are not lawful for you to claim. You can make sure they are omitted from your returns by hiring a tax attorney to assist you. 

Knowledge of the Newest Tax Codes 

A tax attorney is expected to know the newest tax laws as they are passed and enacted. Keeping them straight in your own mind can be complicated. Lay people like you typically do not pay a lot of attention to tax laws as they are created and signed. 

However, your attorney will know what the codes are and how they pertain to your own tax filing situation. He or she can use those laws to your advantage and help you find legal loopholes that could lower your tax burden. You do not have to read up on the tax codes yourself. 

Filing your business's taxes can be a task for which you are ill-suited. You do not have to delay or avoid filing and paying the taxes your business owes, however. You can get them filed in a timely manner and use the tax codes to your advantage by hiring a tax attorney to represent you and your business. 

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