Tax Attorneys vs CPA vs Enrolled Agent

Hiring a Tax Attorney 

Hiring the right tax attorney for your personal or business tax issues is critical. Finding an experienced tax attorney can translate into money for your bottom line. Your goal should be to form a long-term relationship with your tax attorney so you have someone to call in a time of need. Using a tax attorney for tax preparation allows the attorney to keep informed about what is happening in your business or family life so they can better advise you when issues arise. A tax attorney is very important to your future and can help avoid tax issues prior to them becoming a problem. Be sure to take the time to learn about the different types of tax attorneys and professionals and how their particular expertise can help you. 

What are the Different Types of Tax Attorneys and Professionals? 

Anyone can claim to be a tax adviser and anyone who prepares your tax returns does not necessarily have to be licensed by the IRS to do it, so be careful when choosing a tax resolution or tax services firm. 

Verify if Your Tax Attorney or Tax Service is one of the Following: 

1. Enrolled Agent. An EA is licensed by the IRS. Enrolled agents are the most affordable in the tax industry and are usually employed by the individual taxpayer. They are not tax attorneys or CPA’s and will not have the same training needed for representing you on more complex issues in the event of an audit. 

2. Certified Public Accountants. CPA is the statutory title of an accountant in the U.S. who has passed the Uniform Certified Public Accountant Exam and has met certain state licensing guidelines. Unlike Attorneys or enrolled agents a CPA can certify financial records of larger companies to assure that they were done under generally accepted accounting principles. They are excellent at accounting and business tax preparation. When an issue of legal interpretation of the tax law exists the CPA tends to think in black and white, whereas a tax attorneys training allows a more fluid interpretation of the law as it applies to the particular facts. Larger businesses usually use CPA’s in addition to tax attorneys.

3. Tax Attorneys are lawyers who have received advanced training in the area of taxation. They will have a broader understanding of different areas of taxation which will include personal, business, retirement and estate planning tax issues. Many tax attorneys have received masters in taxation. The privacy afforded because of the attorney-client privilege is the strongest professional privilege recognized by law. Many issues with the IRS may require either an appeal to a higher level in the IRS or a legal proceeding in court which requires an attorney. Because of their training an attorneys writing skills, as well as noticing the minor nuances of the law, are better than other tax professionals. This will greatly improve your chances of obtaining a favorable outcome. 

Many tax issues can affect other areas of the law. Outside of the tax area a CPA must consult with an attorney. Advising and drafting documents relating to the formation of business entities, estate planning or other contractual matter should solely be done by an attorney. For example deciding whether to elect to form an S-corporation will involve tax issues as well as liability protection and business management issues. Other than the issues related to tax the CPA should not provide service.

Because many issues involving taxation will involve other areas of law or the courts, an attorney will often be the best professional to protect your interests. If you are in need of help just call Bannon and Associates PC at 1-877-792-3812  for a free consultation.