Accountant vs. Tax Attorney: When and Why To Use Them
When it comes to taxes, you can never be too careful or too organized. Though, if you run a small business, you’re likely going to need help along the way to ensure you’re being careful and organized enough. Businesses may turn to either a professional accountant or tax attorney for help. Despite what you may think, hiring a tax professional is not just for big business! Forming a working relationship with a tax pro can keep you out of hot water with the IRS and take some of the stress off of tax time. Adding a tax professional should be part of your business operating expense—consider it insurance you shouldn’t live without!
There are different types of tax professionals. Commonly, businesses rely on accountants and tax attorneys. How do you know which type of professional is the best fit for your needs? Let’s take a look at the differences between the two professions and how to choose the right one for your tax needs.
You’re probably most familiar with accountants during tax season. But the truth is a qualified accountant can help with much more than just filing your tax return. If you run a small business, it’s a good idea to form a relationship with an experienced accountant so you have someone to call on with tax or accounting questions. This is also true if for personal taxes if you have expenses, income and deductions beyond a simple return.
There are several educational choices for accountants:
Tax preparer certification: Some states allow a tax preparer certification which trains individuals to prepare basic personal taxes. You may be most familiar with tax preparers from places like H&R Block and other kiosk tax-preparation services.
2-year accounting degree: Technical colleges often offer a 2-year degree in general accounting. Graduates may hold a certification or Associate degree in accounting.
4-year accounting degree: Accountants may choose to receive a Bachelor’s degree from a 4-year university.
Certified Public Accountant: The CPA designation must be earned by passing a rigorous examination. CPAs also hold a license from their state of practice and are held to a high standard of practice and accounting knowledge.
When interviewing accountants, ask exactly what duties they are able to perform based in their degree and licensure level. If you’re looking for help preparing taxes and filing the correct forms, a general accountant may suit your needs.
However, if you need help with financial planning, asset management or audit assistance, a CPA may suit better. There may be a cost difference between the type of accountant you choose; however, don’t let cost dissuade you from getting the help that you need to adhere to tax laws.
Keep in mind that accountants are not well-trained in the legal aspects of tax law. If you’ve become involved in legal proceedings with the IRS, your accountant may be able to help prepare necessary information, but only a tax attorney can guide you through the court system.
Tax attorneys are lawyers with a Juris Doctor (JD) degree and admission to the state bar, who also have specific education and experience in tax law. Like accountants you will also find that there are different levels of tax attorneys.
There are several educational and professional choices for tax attorneys:
Holding An Active Certified Public Accountant License: Implies the ability to handle duties of an accountant, as well as those of a legal tax advisor.
Master Of Laws Degree In Tax (LL.M.(Tax)): Having an extra year of law school after earning the JD which is devoting solely to tax education.
Board Certified In Tax Law By Their State Bar: Some states allow an attorney to earn recognition as a legal specialist in their field of law. Requires passing a competency test in tax law and has a minimum number of years practice in tax law.
Tax attorneys understand the finer details of tax law which can be helpful if you’re ever involved in an IRS action. Commonly, tax attorneys can assist with:
Estate planning or filing estate related tax returns
Business start-ups that have a complicated entity or tax requirements
Payroll/employee taxation issues for business with multiple employees
International business and tax laws
Filing a law suit against the IRS
IRS lawsuits against you
Criminal IRS investigations against you
Representation for tax fraud accusations against you
If your business has any legal issues with the IRS, you may want to consider a tax attorney for assistance. A tax attorney can help resolve many tax-related problems. They negotiate on your behalf and are trained to analyze complicated tax information and formulate a plan for resolving your case. Because tax laws change every year, tax attorneys are also invested in constant learning to stay abreast with all the changes. If you feel your business tax situation is above what an accountant can tackle, the next step is to find a tax attorney best suited for you and best qualified to resolve your situation.
If you are facing a potential proceeding in the U.S. Tax Court, check to see that the tax attorney is admitted to the U.S. Tax Court and inquire of that lawyer’s experience in filing a Petition with the Court, negotiating with the IRS Office Of Appeals or IRS Area Counsel and litigating the case in trial should a pre-trial settlement not be reached.
If you are facing a criminal investigation or you have been indicted for tax crimes by the Federal government, check to see that the tax attorney is admitted to the Federal District Court where you live and is knowledgeable about the criminal judicial process and is experienced in defending and litigating criminal cases in the Federal District Court.
The tax attorneys at the Law Offices Of Jeffrey B. Kahn, P.C. located in Los Angeles, San Diego San Francisco and elsewhere in California are highly skilled in handling tax matters and can effectively represent at all levels with the IRS and State Tax Agencies including criminal tax investigations and attempted prosecutions, undisclosed foreign bank accounts and other foreign assets, and unreported foreign income.
Description: Let the tax attorneys of the Law Offices Of Jeffrey B. Kahn, P.C. resolve your IRS tax problems to allow you to have a fresh start.