When Do You Need a Tax Attorney?

Tax accountants and attorneys can help you in your time of need, but the term "attorney" sounds sinister. This implies that you are not only fighting against the numbers, but you are also fighting against the law.

It's true that tax attorneys can handle things that accountants can't, but you don't need to be in the legal fight of your life for the services of an attorney to be more helpful than those of an accountant.

In fact, accountants and attorneys can help you deal with troublesome events from the past and plan your best course for the future.

This is where tax attorneys are likely to come in handy.

When would you need a tax attorney?

Tax lawyers are specialized lawyers in the complex and technical area of ​​tax law. They are the best at handling technical and legal problems associated with your tax situation.

An attorney can step in after you have a problem, but consulting one ahead of time can also help you avoid problems in the first place.

Tax attorneys must have a Juris Doctor degree, commonly known as "J.D." They must be admitted to the state bar to practice. These are just the minimum requirements: Tax attorneys must also have advanced training in tax law. Most will have a master's degree in tax law, known as an "LL.M."

Some tax attorneys also have accounting experience, but not all have tax return preparation experience. His experience focuses on the legal implications of tax situations.

If you are facing a complex accounting problem, as well as a legal problem, you may want to seek an attorney who is also a Certified Public Accountant (CPA) or a Registered Agent (EA) so that they can cover both bases. Keep in mind that you will probably have to pay a lot more for an attorney who is also a talented accountant.

If you have taxable assets

The Internal Revenue Service (IRS) has its hands in a bunch of cakes and not all of them strictly pertain to personal tax returns. Properties must also submit returns to the IRS.

Your property is taxable in tax year 2020 if the total value at the time of your death exceeds $ 11.58 million. In fiscal 2021, this exclusion amount increases to $ 11.7 million.

This high exclusion value means that most people will not have to worry about estate tax planning, but their heirs will have to pay an estate tax of up to 40% of the balance above the applicable limit if their estate exceeds these levels.

The real estate tax exemption was effectively doubled in 2018 by the Tax Reduction and Employment Act (TCJA). However, like many aspects of the CCJA that apply to personal taxes, property tax is set to revert to its pre-CCJA status after tax year 2025.

A tax attorney can help you devise estate planning strategies to help you stay below the exemption limit and reduce your tax liability as much as legally possible.

If you are starting a business

There are many questionable legal questions you need to answer when starting a business, and many of these questions have tax implications. What type of business entity should you create? Do you want to incorporate? Can you function as a sole proprietor?

Any business configuration you choose will have tax ramifications. The attorney can advise you on the structure and tax treatment of your business, including some non-tax issues that you would not have otherwise considered.

Getting involved in international business will complicate your contracts, tax treatment, and other legal issues. The assistance of a tax attorney can be invaluable in this type of situation.

If you have legal problems

If you plan to file a case against the IRS, if you are under criminal investigation, or if you want to seek an independent review of your case in the US Tax Court, you will need the help of an experienced and knowledgeable attorney.

You will want someone familiar with a courtroom. Some non-attorneys may represent clients in court, but it is often best to be represented by someone with legal knowledge.

Your relationship with your lawyer and anything you say or trust him is generally privileged. This means that they have no legal obligation or obligation to disclose to the court anything you tell them. This is not always true for accountants.

Questions to ask a tax attorney

It is important to examine and interview any tax attorney before hiring one. Here are some questions to ask when initially meeting a potential attorney:

Are they admitted to the state bar association?
What area of ​​tax law do you specialize in?
How much does the lawyer charge?
If the attorney cannot help you personally or does not seem like a good option, do you know of another tax attorney who may be more familiar with your type of problem?

Free and Low-Cost Legal Assistance Options

Tax clinics provide free or low-cost legal assistance to low-income taxpayers in the United States. They are funded in part by donations from the Taxpayer Advocacy Service, which is an independent organization within the IRS.

The employees and volunteers who work here are not employees of the IRS or the federal government, but they can help you with taxes and similar matters.

You can find a complete list of low-income tax clinics by state on the Taxpayer Advocacy Service website, along with the languages ​​each clinic serves.

Income limits apply, but the exact income limit depends on the size of your family. For example, a single person who signs up for himself or herself qualifies for free assistance in resolving any tax dispute in 2020 if she earns $ 31,900 or less.

We hope you enjoy watching this video about tax attorney

Source: Optima Tax Relief

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