Hiring a Tax Attorney a Must at Key Moments
If your back tax debt is big enough, the IRS may come knocking at your door threatening to take you to court.
Most people think that the one person that’s the most intimate with their taxes – their CPA – should be their point person when it comes to dealing with an aggressive IRS agent. But CPAs can only get you so far. If you’re looking for the best person to represent you as you fight off an IRS audit, or worse, criminal counts, hiring a tax attorney is a must do.
The tax laws are HUGE and require a lawyer’s legal knowledge
The Internal Revenue Code spans tens of thousands of pages. It’s a result of many a’ politicians putting their hands in the cookie jar and inserting tax breaks for their favorite special interest. It’s also the result of laws drafted by legislators suspicious of the IRS, and those that support it.
But while it’s complicated and large, the tax code is generally something that a CPA doesn’t grasp as well as a tax attorney. Also, only tax attorneys can represent you in United States Tax Court, where 350 special rules apply. A CPA may know how to crunch all the numbers, but trying to get around the hearsay rule is another matter.
Have any tax secrets? Kiss them goodbye if you tell them to your CPA.
Confidentiality is a big advantage to hiring a tax attorney. If you’re looking down the barrel of an IRS gun that comes in the form of threatened legal action, the matters you share with your CPA – like hidden assets or secret financial accounts – won’t be kept confidential. Think of it this way: if your CPA is threatened with legal action by the IRS, he or she will probably bend, throw you under the bus, and spill all the beans.
Tax attorneys come with the attorney-client privilege. This allows you to share potentially incriminating information that won’t end up in a legal pleading drafted by an IRS attorney. While you can’t use an attorney to further a fraud or other crime, matters shared with an attorney are most likely confidential. By hiring a tax attorney you’ll also be hiring peace of mind.
The more a tax attorney knows, the better off you are.
Another major reason to hire a tax attorney is for their specialized skill. Most tax attorneys fit into one of two criteria: either they have advanced legal degrees in tax law, or they’re former IRS agents themselves.
Tax attorneys coming from the former know the general rules of how tax law works. They can be valuable when it comes to making the necessary arguments to reduce one’s tax liability or filing appropriate motions.
Tax attorneys that are former IRS agents know how the IRS works at each step of its process. One way they know all that is by working with the Internal Revenue Manual. While the Internal Revenue Manual isn’t law, it’s the IRS’s set of guidelines that govern its staff. Former IRS agents know its contents, and know when the rules aren’t being adhered to. So if you’re under the gun with tax debt, make sure you’re not being legally abused by having a good tax attorney on your side.
While you may have that long-lasting and friendly relationship with your CPA, knowing your business’s books isn’t enough when the IRS threatens or takes legal action against you. In that case, adding a tax attorney on your team is smart for protecting your rights and your finances.