We all have to do our taxes correctly because the IRS forgives nobody. But what happens when you are faced with an IRS-related issue? From overdue taxes to overwhelming tax debt, there are plenty of serious tax-related matters that are very difficult to deal with. Fortunately, you can ask for help. Your taxes are your responsibility, but you can seek the assistance of a tax lawyer when things get complicated. But how do you know when it’s time to hire an attorney? Here are a few things that can tell you that the time has come.
You have overwhelming tax debt
It’s very easy to overlook taxes, but rest assured that it all catches up to you. Tax debt can quickly turn into an overwhelming amount, which will destroy you financially. To prevent that from happening, you have to take action. If you have large tax debt, you can sign up for an IRS fresh start program. Tax law specialists can help you pay off your debt in several installments, which will not drain you financially, rather than a huge lump sum payout.
You are facing an IRS audit
If you get an IRS audit notice, then it is best you seek professional assistance. The tax code is over 74,000 pages long, so your tax records are likely to need some fine-tuning before facing the IRS. This is the time to call a tax lawyer, who can help you through the auditing process, but who can also represent you should your case be transferred to tax court. Prevention is the best possible approach when it comes to IRS audits.
You are facing suspicion from the IRS
The main goal of the IRS is to make sure that businesses abide by the tax code. As such, they have to make sure that your taxes check out down to the last detail. Even if your business has done nothing wrong, it might exhibit a suspicious pattern, such as accelerated financial growth, and it will be closely monitored by the IRS. If you are facing IRS suspicion, then it is time to get a tax lawyer, simply because you may need a mediator in your further contact with the federal authorities.
You are facing tax-related criminal charges
If you are facing criminal charges related to your taxes, such as tax evasion, do not minimize the situation and get legal representation. Having a good attorney is your best chance at getting a positive outcome and avoiding serious fines (up to $250,000) and even jail time (up to 5 years in prison).
The benefits of working with a tax lawyer
Hiring a tax lawyer might seem like an unnecessary expense, but in the long run, it can help you steer clear of a wide range of tax-related issues. The best course of action is to prevent these problems before they get a chance to affect your life or your business. Working with a professional offers some invaluable benefits that will make a difference. Here are some of them:
Superior knowledge of the tax code
You may do your taxes religiously, but you are far from mastering the tax code. A specialist has a profound knowledge of it and will be able to spot out any irregularities, but also help you optimize your tax records. Moreover, should you be faced with a tax-related issue, a lawyer can use the tax code to your advantage.
Protection from intimidation
Dealing with the IRS can be a very time-consuming process and you are exposed to various intimidation techniques that their representatives might use. An attorney can shield you from all of these intimidation tactics and get you a positive outcome for your issues. Your attorney will act as in intermediary between you and the IRS, so you don’t have to deal with them directly anymore.
Assistance with filing returns
If you have to file tax returns, then your lawyer can help you submit the correct data to the IRS. Moreover, an attorney can help you file late returns, as well as the returns from this year. Should you need an extension for filing your returns, your lawyer can fill out the required paperwork and get your request in.
As you can see, there are several situations that may require you to seek professional help from a tax lawyer. If you are dealing with overwhelming tax debt or facing IRS suspicion or charges, then it is time to get yourself an attorney, who can use the fine details of the tax code to your advantage.
If nothing is certain except death and taxes, then tax lawyers will always be in demand. Unlike your typical lawyer, tax lawyers are not afraid of numbers. In fact, they’re great with numbers! On top of that, they juggle federal and state tax codes, which are super complex and change on a regular basis.
But what does a tax lawyer do during their career? We’ve got you covered. Read on to learn about life as a tax lawyer!
How They Got Here
Some people know from the get-go that tax law is the way they want to go in their career, even as early as undergrad. With that in mind, many start their journey to their career by majoring in accountancy or business management. If they do well in undergrad, then they head off to law school.
Law school is a three-year process nearly every future attorney must go through in order to practice law. The first year is made up of required classes like Contracts, Torts, Property, Criminal Law, and Legal Writing. You get to choose most of your classes in the next two years, and some schools allow you to concentrate on a certain practice area, but that is not a requirement.
Tax Law LL.M
After you finish law school, you are free to take the bar and get a job working as a tax attorney. But if you want to amp up your resume, then spending an extra year getting an LL.M in taxation may be the way to go. You will want to be strategic about the law school in which you choose to get your LL.M because there are definitely some standout programs at select universities.
Once you complete your LL.M, you’ll be good to go for a career in tax law with a nice pedigree.
Work for a Law Firm
The majority of tax lawyers work in a law firm in a variety of capacities. Many tax lawyers land their positions in a law firm through the work they do as a summer associate during law school.
Tax lawyers who work for larger law firms are often put on retainer by large companies to handle their complex tax issues, including international tax law for multi-national corporations. These tax lawyers make sure that the corporation is in compliance with all federal, state, and international tax laws. In the event that the corporation violates a law or is audited, then the lawyer provides representation for them through any audit or investigation.
While many tax lawyers work for big law firms on behalf of corporations, a huge amount of them work on their own or as part of a small firm. They represent smaller companies and individuals in their dealings with state tax boards and the IRS.
In addition to hanging their own shingle and working with a low-income legal aid organization, tax attorneys may also be hired in a full-time position with a company, large corporation, or federal, state, or local government.
Help You Get the Most Out of Your Tax Return
Many individuals and companies employ both a tax attorney and a CPA or have them on retainer. Tax attorneys that work on behalf of individuals instead of companies make sure that complex tax returns are filed in compliance with applicable tax laws.
While that is incredibly important work, one of the biggest services they provide to their clients during tax season is reducing their overall tax liability as much as possible. This includes taking advantage of all possible deductions and making sure that clients get as big a refund as possible or a small tax bill.
For individuals with very high incomes, having a tax attorney on retainer is a must. The attorney assists their clients throughout the year in order to make strategic moves to reduce their overall tax liability.
Provide Tax Audit Defense
Lots of people never even think about hiring a tax lawyer until they’ve received a letter from the IRS informing them that they have been selected for an audit. At that point, individuals are typically referred by CPA or company that prepared their taxes to a tax attorney.
Tax lawyers who provide audit defense services are well-versed in how the IRS conducts its audits and know what to do to keep clients in their good graces. That doesn’t mean that, if clients intentionally or accidentally made errors or failed to include income on their tax return, they can get them out of paying the taxes clients owe. They can, however, minimize the financial hit their clients take or get them out of jail time.
Help People Work with the IRS on Back Taxes
Believe it or not, there are people out there who have not filed their taxes in years. This includes people who have straightforward tax returns and would have received a return if they had filed. The majority of these clients, however, failed to file in an attempt to dodge excessive tax liability that they can’t afford to pay.
The IRS, of course, doesn’t forget that they haven’t paid, and, in turn, files a tax return for them that does not include deductions or tax credits, and sends them a bill for what they owe. When people fail to pay what they owe, then the IRS takes steps to force people to pay, like garnishing income or placing a tax lien on their property. A tax attorney steps in in these situations and works with the IRS to get their clients on an affordable payment plan or reduce the overall amount owed.
What Does a Tax Lawyer Do? A Lot of Things!
Tax law is an incredibly specialized area of law with a broad array of potential employment opportunities. The majority of these positions pay handsomely, and tax lawyers are rated as the happiest in the legal field.
So, what does a tax lawyer do? They do everything from working for a law firm to working for companies to working for everyday people having issues with the IRS.
Want to learn more about becoming a lawyer or the ins and outs of life as an attorney? You’ve come to the right place. Check out the rest of our blog posts for everything you need to know about life in the legal field!
As a business owner, you’ll face a ton of challenges. One of the most common challenges is a lack of knowledge regarding filing taxes and managing finances.
This definitely isn’t something you want to wing or try and teach yourself. Your business can face serious penalties if you’re not filing your taxes in the correct way. That’s why it’s best to hire an attorney.
Read on to learn more about the other benefits of hiring an attorney to help you with your taxes. You’ll also learn what you ought to look for when you’re searching for the best tax attorney.
Why Hire a Tax Attorney?
Tax attorneys can provide you and your business with a lot of great benefits. The following are some of the main reasons why business owners choose to invest in the help of a tax attorney:
Understand the Tax Code
As a business owner, you have a lot on your plate at all times. There’s a good chance you don’t have several spare hours a week to dedicate to learning the U.S. tax code — nevermind the fact that it also changes on a regular basis.
If you’re not a tax expert, you need to have someone on your team who is. Tax attorneys have in-depth knowledge of the U.S. tax code and are paid to keep up with any changes that happen to it.
A tax attorney can help to protect your business from audits, intimidation, and potential abuse from the IRS.
If you want to have someone on your side who knows the law and knows what is and is not permissible, it’s best to hire a tax attorney.
Having one on your payroll can help to give you peace of mind if nothing else.
Get Help Filing Returns
Oh, taxes. They have to be filed every year, yet they always seem to take us by surprise.
If you aren’t looking forward to filing your tax returns as a business owner, why not bring on a tax attorney who can help with the process? They can work with your accountant to ensure everything gets filed in the correct way and submitted on time.
Protect Income and Assets
A tax attorney will ensure you don’t pay more than you should to the IRS each year.
They can also help to protect you from tax penalties and ensure that as much of your business’s revenue as possible remains in your business.
In the event that you do owe the IRS more than you can pay, a tax attorney will also help you set up installment plans and minimize the damage.
It’s also helpful to have a tax attorney on your team for help dealing with other lawyers or with representatives from the IRS. Your attorney can communicate with these individuals on your behalf and ensure you don’t accidentally say anything that could get you into trouble later on.
Tips for Hiring a Tax Attorney
If any of those benefits sound appealing to you, you definitely ought to look into hiring a tax attorney for your business. Of course, you also need to make sure you’re hiring the right person for the job.
Here are some tips that will help you vet potential candidates and find the right attorney for your business:
Ask for Recommendations
If you have no idea where to begin when it comes to hiring a tax attorney, reach out to others in your professional network.
Your accountant might be able to recommend someone, for example. The same might be true for other lawyers you’ve worked with in the past.
Consider Their Qualifications
Once you have a list of a few candidates, dig a little deeper to learn more about them. Find out where they went to school, when they graduated, and how long they’ve been practicing.
Run Your Own Background Check
Check with your state’s bar association to ensure the attorney you’re considering is in good standing. Your state’s bar association can let you know if there are any complaints against this attorney or if their license has lapsed or is suspended for some reason.
Find Out About Professional Affiliations
This isn’t necessarily a requirement. However, it can be helpful to have an attorney on your side who is affiliated with professional organizations like the National Association of Tax Professionals.
This shows a dedication to staying informed about the latest tax code changes. It can also be a sign that they have professional connections that could come in handy in the future.
Avoid Impatient Attorneys
Steer clear of attorneys who try to pressure you into working with them and signing a contract on the same day you meet them. They should be willing to let you take your time and consider all your options before making a decision.
Be Wary of Sales Gimmicks
Be wary of attorneys who use gimmicks to try and make themselves more appealing. Your attorney cannot guarantee a specific outcome, for example. Steer clear of these people and work with ones who are honest from the very beginning.
Schedule a Consultation
You can learn a lot about an attorney by scheduling a consultation with them. Pay attention to the way they behave during the meeting and the general vibe you get from them.
Consider the customer service you receive when you call to set up the appointment, too. Is it easy for you to geta hold of someone? Are you treated in a polite and professional manner?
Silver Tax Group also recommends working with an attorney that has people available to help on a 24-7 basis. That way, you’ll have peace of mind knowing help is always a phone call away.
Find the Best Tax Attorney Today
A tax attorney can be an invaluable addition to your business. The key, though, is to make sure you’re working with the best one.
Keep the tips listed in this article in mind as you begin your search for the best tax attorney and you’ll have a much easier time finding someone who meets your specific needs.
If you’re ready to start looking for a tax attorney, don’t forget to try our free search tool, too. It helps you to find qualified, credible tax attorneys (and other types of attorneys) in your area.
It’s a time of year that many Americans dread, avoid, and put-off: tax time. No matter how organized you keep your expenses, there’s a certain amount of stress that arises every time Uncle Sam comes knocking.
Some situations, of course, cause more stress than others. If you’re facing an IRS audit or have some sort of complicated income situation, you might want to seek some extra help. Ditto if you’re starting a new business.
A tax lawyer can help ensure that you’re doing everything properly. Tax laws can be quite complicated, but an experienced lawyer can walk you through the process with ease. How do you find the best attorney for you? Read on and we’ll walk you through what you need to know.
Start With Some Research
If you really want to find a tax attorney that will be a good fit for you, you’ll need to put a little bit of work in. Doing some research can help you find the right person and save you from trouble down the line.
First and foremost, you should ensure that a tax attorney is the best person to help you with your current problems. Tax attorneys can work for high rates, and there may be other professionals who can help you with basic tax issues for less.
If you’re simply looking for help planning or filing your taxes, you might not want to hire a tax attorney. If you need basic filing assistance or specialized advice, you might want to hire a different tax professional. If you have questions about cannabis tax planning, for example, that doesn’t mean you need to hire an attorney.
But if you the situation you’re in presents a high amount of risk (audits, new businesses) then you might want a tax attorney on your side.
A good place to start is by asking friends and colleagues if they have any personal recommendations. Many people have worked with tax attorneys before, and they might be able to point you towards a person they think is a very strong choice.
If your friends and family don’t have recommendations, try asking your accountant, banker, or other lawyers if you’ve worked with any. It’s more likely that these people will know and be able to recommend solid tax attorneys.
In a worst-case scenario, you’ll be able to search online and find solid options. But it’s nice to be able to get a personal recommendation that you can trust.
What Qualifications Should You Look For?
What makes a good tax attorney? How can you be sure the candidates you’re looking at will do a good job? There are a few ways to narrow the field down.
You’ll want to make sure the lawyer you’re considering is board certified. There are programs at the national and state level that certify lawyers to work. Lawyers working without board-certification should not be trusted.
The seal of board-certification should make you feel more confident that the tax attorney you are considering knows what they’re doing. It can be a smart idea to pick an attorney who has been certified for at least a few years. This amount of time means they’ll probably have a number of cases already under their belt and can use that experience to help your particular case.
Depending on your particular situation, you may want to find an attorney who has other qualifications. Some tax attorneys are also certified as public accountants, which may be helpful depending on your personal needs.
Some lawyers have had extra schooling and obtained extra degrees in the area of tax law. While it isn’t essential to take on this extra schooling, you may find that you want to hire a lawyer that has this extensive knowledge and schooling.
You can also go to a board’s website and search the records on the attorneys that you are considering. Here, you’ll find a list of any previous complaints or punishments made against the candidate in question. Finding an attorney with a clean record will help you feel more confident in your choice.
Conducting An Interview
Once you’ve whittled down your list to two or three prospective attorneys, it’s time to get in touch. Try to set up a consultation with the lawyers remaining on your list. Then gather the assorted documents you’ll need to explain your situation to an attorney.
When you sit down with an attorney, walk them through your needs and questions. Once they understand the situation, ask them about their experience with similar cases. Have them outline what they’ll be able to do in your particular situation.
When sitting with these people, gauge their attitude and level of commitment to your case. Trust your gut when it comes to the flow of communication: you might be seeing this person a lot, so you probably don’t want to hire someone you don’t get along with.
A competent and worthwhile attorney will be engaged in your discussion. They will likely ask you many questions and try to really understand your case. If an attorney fails to do this, they might not be a strong option. If you can find an attorney who feels invested in you and your case, you likely have found the right fit for you.
Hiring The Best Tax Lawyer For You
Tax laws can be complicated and navigating different legal situations can be highly stressful. Having a strong tax lawyer on your side can make all the difference.
Need more legal advice, tips, or tricks? Check out our blog for more.
IRS issues can hit anyone at any time, and it is important to weigh all options available to you.
The only way one can do that is by simply learning what it means to fight the IRS alone or fighting the IRS with an experienced lawyer by your side. The following will help you understand the difference between these choices and help guide you to the one that works best for your needs.
Should You Get a Tax Lawyer?
Most of the time, people hesitate to hire a tax lawyer because they are not sure if they even need one. Figuring out if you need one starts with asking yourself a few questions; for example, does the IRS issue sound complicated, such as an audit?
Having legal representation means that any negotiation between you and the IRS is done through a lawyer who knows what to say to get penalties reduced or to find a compromise between the two. Keep in mind that some complex tax situations are going to require knowledge of not only tax laws but the language used by IRS bureaucracies.
A lawyer will be there to cut through the jargon and help you understand the proceedings of the particular problem you are going through. Keep in mind that misunderstandings could end up costing more money or prolong this tax problem. There are times when the IRS actually asks inappropriate questions that a good lawyer can shield the taxpayer from.
It is easy to see how a tax attorney can not only help protect the taxpayer but also reduce the time spent dealing with this particular issue. According to Patrick Cox from Tax Defense Partners that the “goal is not only to attempt to achieve tax debt relief and tax debt settlement at the lowest amount allowed by law, or a payment schedule that least disrupts your economic life but also to reduce your anxiety and stress.”
A tax attorney that does not attempt to do this for his or her client may not be the best choice.
Consider the following points when looking for a tax attorney:
- The professional should be experienced in the tax issue you are dealing with.
- There should be third-party reviews about the lawyer you are considering.
- Check for accreditation and degrees that fortify this lawyer’s capabilities.
- Find out how this lawyer is going to get paid for his or her services before hiring.
Can Taxpayers do Anything on Their own?
As valuable as a tax attorney can be to a person going through tax issues, some individuals still want to do something to stay in control of the situation. The following are some of the things a taxpayer can handle as long as he or she has enough time and knowledge:
A small mistake or a routine interaction with the IRS can be done without legal representation. Most of the time, things like a small mistake on a tax return can be addressed by simply having a conversation with the taxpayer’s preparer.
A taxpayer that needs an extension to complete a tax return can also take care of this particular problem without the help of a lawyer. The only thing that is needed is a simple Form 4868. The instructions are on the form itself and are pretty self-explanatory.
Another thing a taxpayer can do on his or her own is submit an “offer in compromise.” The IRS has set up this program for taxpayers who cannot pay or have trouble paying what they owe. In essence, the taxpayer is petitioning the IRS to allow them to pay what they owe but at a much lower rate. This action is not too hard to do without the help of a lawyer.
It is clear that there are a few steps that anyone can take without hiring a tax attorney.
Of course, there could be other small issues that could be taken care of without any tax law help, but it is important that the taxpayer is honest with him or herself in these matters. Keep in mind that depending on the taxpayer’s tax issues, a small mistake could have dire financial consequences.
Hopefully, some of this information makes it easier for taxpayers to figure out when they need a tax attorney and when they can afford to skip one.
If there is any government agency everyone wants to avoid at all costs, it is the Internal Revenue Service. The tax collection division of the United States government has a long history of being extremely tough when it comes to settling tax debts with American citizens who may be attempting to skirt on their financial obligations to the government based on their personal income levels.
Tax evasion cases can often be very serious, and historically many delinquent taxpayers have faced jail time when they could not settle with the IRS. But, several years ago under the Obama Administration, the agency changed their mission statement to being a “kinder and gentler IRS” while announcing that some individuals who were delinquent on their income taxes could possibly be eligible for a significant reduction.
But, as with many other government programs, qualifying for the offer in compromise (OIC) tax relief benefit is not as easy as it may seem. And, there have been many individuals who submitted an OIC just to have it flatly rejected, usually based on the claims by a taxpayer that the obligation cannot be paid or would result in an insurmountable financial burden. Learn more about how an OIC works.
Here are a few advantages and disadvantages to consider when requesting an OIC approval.
Advantages of an Offer in Compromise
There are several advantages of filing an offer in compromise when there is a distinct possibility it will be approved. The first advantage is that the consistent cloud over your head of the IRS looming to foreclose ends with acceptance of the offer. Even the decision by the agency to investigate the offer can help.
The offer acceptance does not stop the repayment program, but it stops the anxiety of not knowing what will happen, especially when it could result in the shuttering of a personal business. It also means the credit score of the filer will improve as well in most cases when the IRS lifts the collection status of the account. Even an offer that is being investigated will halt the collection process until the IRS renders a final decision. The purpose of the policy is to give a fresh start to those who are delinquent, and many times this is the ultimate advantage.
Disadvantages of an Offer in Compromise
The disadvantages of filing an offer in compromise can be significantly worse than the advantages in an unacceptable situation. One of the first disadvantages is that the IRS will want a large amount of personal information regarding finances that will include a detail listing of income, debt liabilities, and personal assets. These assets can also include retirement accounts, which can make a major difference for those nearing retirement, because the IRS has a 10-year window in which to collect the final agreed upon financial amount.
The filer is also typically placed on probation for a period of five years when an agreement is fulfilled in installments, which can also place more pressure on the filer to meet the repayment schedule. Even when the IRS settles for a minimal amount, this can be a real ongoing problem for the filer.
Additional Potential Problems
The primary concern of the IRS is collection of the tax debt unless there are particularly egregious circumstances involved that indicate criminal behavior. The government agency could actually decide the debt cannot be collected, but that is not exactly forgiveness. The damage to credit scores will remain intact until the debt is settled. But, the biggest problem with an offer in compromise is convincing the agency to approve the request, as they deny up to two-thirds of all submissions.
Accepted offers often require the expertise of an experienced tax liability attorney who knows what to expect as a response from the IRS and understands how to craft an offer that the government may deem acceptable. There is always a 9-12 month investigation during the approval process and more problems can arise regarding taxes during that time.
There is nothing automatic about an offer in compromise to the Internal Revenue Service, and all filers should know that from the very beginning. That is why it is vital to have an experienced tax relief attorney representing your case when the IRS comes calling. It is not just an investment in your personal finances. It is an investment in your future.