Tax attorneys specialize in the area of tax law. Unlike tax preparers or accountants, they generally do not prepare tax returns (although they will in some situations). Instead, tax attorneys help with complex tax and estate planning, and they handle tax disputes with federal, state, and local tax authorities. Determining when you can handle a tax issue yourself and when you need an attorney can be tricky. So when do you need a tax attorney? Let’s find out!
When Do You Need a Tax Attorney?
Tax attorneys focus on designing and implementing tax strategies for you, your family, or your business that will save you tax dollars in the long run. A tax lawyer will also represent you if you have a dispute with a tax authority. The answer to the question: “When do you need a tax attorney?” is simple in several situations.
You should generally consult a tax attorney when:
- You plan to appeal a notice of deficiency or an IRS decision through the U.S. Tax Court.
You should always consult a tax attorney when:
- You are under criminal investigation.
- You have committed tax fraud.
There are two other situations in which you may want to consult a tax lawyer . . .
#1 – Complex Tax Planning
Tax attorneys know the tax code very well. They can use that knowledge to set up an estate plan or tax structure that will help you avoid paying high levels of taxes. They do this in several areas of tax planning:
- General income tax planning. A tax attorney can help you decide the best options to choose in structuring your affairs and transactions to your best advantage when filing your personal taxes.
- Estate tax planning. When designing your estate plan, your tax attorney can help you create an estate structure that prevents or minimizes high taxes. That way, your money can go to your loved ones or a charity of your choice instead of the government.
- Business tax planning. Planning a tax structure for a business can be complicated and consideration can change over time. If you are just starting a business or you believe that your business structure needs to be reevaluated for tax purposes, a tax attorney can help.
- Charitable tax planning. Giving to charity, especially in the context of an estate, is one way to avoid paying taxes on some of your assets, and put your assets to a use you choose instead of our assets going to the government as tax. To use this tool effectively, contact an experienced tax attorney.
#2 – Resolving Disputes
Tax attorneys are experienced in tax dispute resolution, whether that resolution comes through negotiations or a trial. Deciding when you need a tax attorney is fairly straightforward in this context. You should contact an attorney in the following situations:
- When you cannot seem to get the taxing authority to work with you. If you have tried to communicate with the IRS or another taxing authority, and they seem to be ignoring you, you can’t negotiate an acceptable solution, then it may be time to call a tax attorney. Taxing authorities may not work well with you if you don’t understand the system.
- When you need to work out a deal. Attorneys are great negotiators, and they may be able to work out a deal with the taxing authority that will help you avoid having to go to trial, struggle with liens and levies, or want to file an offer in compromise
- When you need representation at trial. The IRS has many tax experts that will consider your case. If you have a tax attorney on your side, you can level the playing field.
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When do you need a tax attorney? When you cannot or should not handle tax issues on your own. It is always a good idea to consult a tax attorney if you are unsure. Carnahan, Evans, Cantwell & Brown, P.C. can help you with your tax planning and tax dispute needs. Give us a call at 417-447-4400 today.