Balance – the personal finance website – defines two types of tax law: tax controversies and tax planning. A tax planning lawyer is your go-to professional if you need help minimizing your tax burdens, avoiding a tax audit, and handling your financial affairs. On the other hand, a tax controversies lawyer will defend you or your business in legal actions, investigations, and audits by state tax agencies or the IRS. But when do you need a Miami tax lawyer? Can you handle your tax matters yourself or hire a CPA? Let’s review some situations that call for a tax attorney.
1. You Have Been Accused of Tax Fraud
If the IRS accuses you of tax fraud or income tax evasion, the first person you should contact after you learn of the charges is a tax attorney. Criminal charges of such a nature do not just affect you. They also threaten your freedom, livelihood, assets, and reputation. A tax attorney is well-versed in state and federal tax laws and, therefore, better placed to provide legal advice and represent you in court.
Working with a tax attorney also qualifies you for attorney-client privilege, meaning all your discussions with your attorney will remain confidential. This does not apply to CPAs, and the IRS is within its rights to subpoena your accountant as a witness against you in your tax fraud case.
2. You Are Being Audited
When the IRS launches an audit, they will usually interview you extensively to determine how to proceed. The IRS’s criminal investigation division (CID) gets 50 percent of its referrals from these interviews. Retaining an experienced tax attorney will ensure you have a professional next to you that understands and can protect your rights.
3. The IRS Claims You Owe a Large Tax Debt
The IRS, like any other entity, can make mistakes. This is primarily thanks to the computer systems it uses, which are mostly outdated and human error. Consequently, the IRS is not always correct when it claims that an individual or business owes a significant tax debt and penalties. This is why you should never take their word for it when you receive the call. You should hire a tax attorney.
Tax attorneys have extensive knowledge of the tax code and can apply it to prevent you from making inaccurate or unnecessary tax payments. If you hire a CPA instead, they might be able to point out the inaccuracies but unable to help you use the information to get out of the alleged tax debt.
4. You Need Someone to Represent You with the IRS
Experienced tax attorneys have dealt with the IRS for most of their careers and know how to protect their clients’ rights. When you hire such a professional, you do not have to deal with the IRS yourself – you might never even need to attend a meeting. Your attorney will handle all the negotiations and fight for the lowest possible settlement on your part. They can also apply their expertise to help you secure an offer in compromise (OIC) or installment agreement.
5. You Need Trust and Estate Planning Help
Creating a trust, preparing and implementing an estate plan, or transferring assets or property are highly sensitive processes. Before embarking on them, you should hire a tax attorney to help you reduce the taxes, file the paperwork, and ensure everything is on the up and up. This also applies to making investments, especially in real estate properties involving multiple units or owners.
6. You Are Starting a Business
Lastly, you will need a tax attorney to help you navigate the tax issues that come with opening and running a business enterprise. Tax attorneys can advise you through tax audits and help you implement strategies to minimize your tax bill.
Tax Attorney Vs. CPA
Many business owners wonder whether it is necessary to hire a tax attorney when CPAs exist. So what is the difference between the two, and when is the latter an appropriate hire? Essentially, both these professionals work on tax issues. However, tax attorneys are lawyers who passed the bar after going to law school and are licensed to litigate various legal matters.
A CPA, on the other hand, is an accounting expert who is qualified to perform financial duties like tax preparation, auditing, and bookkeeping. Hire a CPA to handle your tax returns and prepare your financial records but get an attorney to help you with complex taxation matters.
Contact The Pinnacle Law
Are your current tax problems outside your experience or knowledge? You need the expert help of an experienced Miami tax lawyer. At Pinnacle Law, we are dedicated to helping you navigate complex tax matters and get the best possible outcomes. Our attorneys have worked with the State Attorney’s Office, United States Attorney’s Office, Securities and Exchange Commission, The White House, and multiple businesses in the private sector. Contact us today to learn how we can help you.