Accountants help fight with figures while tax attorneys help to fight law. There may be a stage where a tax attorney is needed. To put it in simple terms, tax accountants cannot handle situations that tax attorney do. Tax lawyers specialize in the tax laws and are well qualified and equipped to handle problems arising related to taxation. In most cases tax attorney come into the picture after a problem arises but there is nothing wrong to consult one to prevent unpleasant situations.
When to engage a tax attorney?
Businesses and estates have to file returns and in the following cases the assistance of tax attorney is a must:
· As per 2017 regulations, any person with estate value of over $5.49 million or combined estate value of $10.98 million if married is taxable. This is expected to rise every year. In such cases, your heir has to pay upto 40% as estate tax. It is here the role of the tax attorney comes into play. They devise strategies to help you stay well under the threshold level by avoid big chunk of your estate being taken away as tax.
· While you start a business, the assistance of tax attorney is felt. They let you know what type of entity needs to be setup, whether it should be incorporate or sole proprietor. Irrespective of the business type you choose, the tax ramifications cannot be done away with. A tax attorney will advise on the tax measures and structure for your company and this includes non-tax issues.
· While setting up an international business you need to get the assistance of tax attorney for tax treatment, legal matters and contracts.
· Incase you are under criminal investigation conducted by IRS or if you want to go for independent review at US Tax court it is best to seek the advice of tax attorney. Any court transaction needs someone well versed with the court room and who could do it better than attorneys. The need for an attorney is impertinent when you have committed a tax fraud or looking for credits or deductions. The attorney keeps all the matters confidential, the same cannot be said about tax accountants.
Tips to choose a tax attorney
A tax attorney should have a Juris Doctor degree and must be a member of the state bar. Additionally they need to have advanced training in Taxation law. In most cases they will have a Master of Law (LL.M.) degree in taxation and it is also known as LL.M.
Tax attorneys with background in accounting would be an added advantage. Though a tax lawyer is not required to prepare tax returns, they focus on legal aspects of tax. Incase you are facing both accounting and legal complications, it is best to call upon a tax attorney, who in most cases will also be a certified public accountant. Tax attorneys are expensive and are rare but you can find a reliable one if you do some basic research.