Whether you need help dealing with the IRS or planning your estate, there are several situations in which tax lawyers can be a huge help. However, if you’re not sure how to pick the right attorney for your specific needs, you are not alone. Luckily, we’re going to give you a rundown of what you need to know to choose the right tax lawyer for you.
What Does a Tax Attorney Do?
As you’d expect, a tax lawyer’s primary specialty is tax law. They help people comply with IRS rules and optimize their tax situations. Many even specialize in international and business taxes, as well as estates.
Tax lawyers generally work either in consulting firms, accounting firms, or law firms. In law firms, tax lawyers generally advise their clients about the best way to get favorable tax treatment in multiple types of situations. Often they will draft legal documents, including contracts, if they need to represent their clients in any case, including heading to court. Tax lawyers that work in consulting or accounting firms tend to help their clients follow tax rules correctly.
When to Hire a Tax Lawyer
It’s not always in your best interest to hire a tax lawyer. However, some situations will undoubtedly work to your advantage. You will also need to pay attention to their specialties since not all tax lawyers will work in all areas of tax law. Nevertheless, here are some ordinary circumstances where the benefits of hiring a tax lawyer will generally outweigh the drawback of the cost.
Tax Disputes & Relief
If you owe taxes and need help obtaining tax relief, working with a tax lawyer can give you much more leverage when dealing with the IRS and any potential court matters. They can help with innocent spouse relief, applying for offers in compromise, and setting up payment plans to settle tax debt.
If you are disputing taxes and may need to either sue the IRS or file suit with any other state or local tax authority that you are contesting, a tax lawyer will be indispensable. Not only will they be your guide through the entire process, but they will be your advocate in a US Tax Court.
Most tax attorneys can help you create a will or participate in other estate planning work to ensure your final wishes are followed. Working with a tax lawyer for estate planning can also help manage the extensive paperwork, reduce potential estate taxes, transfer assets to beneficiaries, and assist in creating trusts.
Starting A Business
If you are considering starting a business, expanding your existing business, or selling the business entity, a tax lawyer with a specialty in business will be a great ally. This can be particularly true if you plan to start a corporation such as an S-Corporation or C-Corporation, which can necessitate complex paperwork and incorporation documents.
If the business is being expanded, a tax lawyer could be crucial for adhering to interstate tax law. They can also be invaluable if you are selling your business and want to ensure you are entirely free of any legal hangups before, during, and after the process.
What to Look For in a Lawyer
- Law License: The main thing you want to look for is a license to practice law in your state. To confirm, just head to your state’s bar association website to search.
- Education: To obtain a law license in most states, you have to graduate from law school and pass the BAR exam. You will see that many tax attorneys have more than just the bare minimum education; they may also have a master’s degree in taxation (referred to as an LL.M) or be certified public accountants with a CPA license.
- Preparer Tax Identification Number (PTIN): Any individual who prepares tax returns for money is required by law to have a PTIN from the IRS. They have to provide you with their PTIN and sign your tax return document.
Choosing A Tax Lawyer For Your Needs
Considering hiring a tax lawyer can seem like a daunting task initially. Still, if you take a little time to consider your needs and use this article as a guide, you should be able to make an informed decision quickly. Be sure you know the scope of the duties you need them for, and make sure you vet them to the best of your ability, and you will be in great hands.