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Posted On December 15, 2020
Should You Hire a Tax Attorney or a CPA?

Should You Hire a Tax Attorney or a CPA?

The decision to hire a tax attorney or a CPA depends on the taxpayer’s specific tax situation. Both can prepare taxes, but it is best to hire a tax attorney if a person is in trouble or in debt with the IRS. Hiring a CPA to save money could be more costly than hiring an attorney from the start.

Randolph Law Firm has Tax Attorneys, CPA’s, and IRS Enrolled Agents on staff to best fit the needs of most cases.

When Is a Tax Attorney Needed?

Tax attorneys are tax professionals who are trained in accounting and finance. They are educated in the tax law more than a CPA typically is, and they are also licensed to practice law. A tax attorney may specialize in tax-related rules and policies at the municipal, state, and federal levels.

A tax attorney may choose to specialize in business transactions with complex tax liabilities, estate planning and transfers, or property acquisitions. They provide the following services:

  • Representing clients during administrative appeals and in Tax Court, the Court of Appeals, and the U.S. Supreme Court
  • Representing clients during IRS audits
  • Providing legal advice about tax liability, including matters involving property liens, wage garnishments, and account levies
  • Working side-by-side preparing tax documents with CPAs

Consulting with a tax attorney is a wise choice when forming a business or planning an estate to reduce tax liabilities. If a taxpayer is suing or under criminal investigation by the IRS, a tax attorney can provide representation within the U.S. Tax Court.

An important benefit of hiring a tax attorney is that the taxpayer has the protection of attorney-client privilege. This protection is not given by a CPA who could be required to testify.

When Should a CPA Be Used?

Not all tax matters require a tax attorney. Some can be handled by licensed CPAs. Tax returns that do not involve back taxes or liens are suitable for preparation by a CPA. These professionals are a good choice for financial planning services. They are also helpful when tax planning is needed, or if the taxpayer has a simple tax problem.

A CPA can represent his or her clients in U.S. Tax Court by becoming an Enrolled Agent. However, if the taxpayer faces a tax controversy, hiring a tax lawyer could be a better option.