4 Things You Should Know Before You Hire a Tax Attorney or a CPA

effective tax planning

There are times when having lots of questions popping into our mind related to tax matters and it seems like a mystery. When it comes to taxes, being too careful or too organized is a difficult thing to do. We might get tired of answering these questions within ourselves: Who should I approach and how to deal with it? I too faced such a baffling situation so thought of sharing it with you.

When my company was facing a legal battle against IRS, just like everyone I was also confused with whom to look for and what to do? I spent most of my time in my PDA, googled a lot and was tired of reading numerous reviews about CPAs and Tax attorneys. Then, after a wide research finally, I found a tax attorney who turned out to be an acquaintance, not only helped me to win the legal battle and throughout the entire phase as well.

People who get themselves trapped in these tricky situations, knowing the difference between tax attorneys or a CPAs will help in salvaging the situation and pride.

“Nothing is certain except death and taxes.”~ Benjamin Franklin

As rightly stated, you might not know when there will be a situation cropping-up for a need to hire a tax attorney or a CPA. In a general note, almost all businesses depend on tax attorney or accountants for a lot of business-related matters. So, it’s essential to know about the roles they perform before you hire one.

Let us know the difference between a tax attorney and a CPA:

Who is a tax attorney?

A tax attorney can double up as a tax consultant and a lawyer to fight the legal battle against IRS. Tax attorneys generally pursue a degree in law and specialize in taxation issues. Certain people pursue their master in law while others proceed to obtain their CPAs license. A tax attorney can provide attorney-client privilege as well. They can be the source to look for; when you need advice regarding any complicated legal issues. Their USP:

  • Confidentiality (attorney-client privilege)
  • Expertise in decision making related to tax matters

Who is a CPA?

Certified public accountants (CPA) are people, who help companies in bookkeeping, financial planning, tax planning, budgeting, cost and asset management, and can help in in-depth business growth decisions. Unlike tax attorney, they don’t fight legal battles on your behalf but can assist in legal proceedings since they prepare the financial statements. They have more specialized pieces of training and credentials as well. Now that you know the difference between the two, let us look at different scenarios to know whom to approach.

What’s common between the two?

While there are differences between a tax attorney and a CPA, there exist a few similarities as well. Both perform similar functions related to basic tax matters. For instance:

  • Both provide tax planning support.
  • Both assist individual & organization regarding financial decisions based on possible tax benefits and penalties as well.
  • Both can help organization or individual to defend themselves against any tax-related issues.
  • Both have had an extensive education to practice in their fields.

Things to consider before you hire a tax professional:

Before you hire a tax professional, you need to know them well. Consider these points and ask the professional about the following:

  • Education
  • Expertise in the field
  • Tax strategies and preparation strategy
  • Fees (It’s important to know if it fits your budget)

Who and when to look for?

Look for the tax attorney when:

  • Look for a tax attorney when you are fighting legal battles against IRS.
  • When you want to file litigation on IRS.
  • The tax attorney is experienced in this kind of legal battles and can help you in payroll taxation issues, international tax lawsuits.
  • You are planning to start a business and require a legal counselling to understand the structure, type of entity and tax matters.
  • When you are under IRS criminal investigations.
  • You are bothered by visits at your place for tax fraud investigation.

Look for the CPA when:

  • When you want someone to handle your tax-filing for your organization or individual, as they specialize in tax preparation and planning.
  • If you’re looking for a holistic tax strategy to deal with professional & personal financial issues.
  • For business growth and investment plans
  • For general business advice, an accountant may suffice your needs.
  • To assist with audits for your firm.
  • For budgeting your business, cost and asset management.

Summing up:

Never take your tax-related issues to the next level and be careful when you’re handling them. Now that you have understood the difference between a tax attorney and a CPA, it will be easy for you to hire the right professional as per your needs.