3 Situations When You Need a Tax Lawyer

Handling personal finances and fulfilling tax obligations are some of the most important daily tasks for people. Although there are occasions when individuals can do tax planning on their own, there may be times when they will require the expertise of professionals to help them deal with more complex tax issues. Whether it is for personal or business cases, it may be in your best interest to hire a tax lawyer to assist you. 

In general, tax lawyers are professionals who help people arrange their finances properly and ensure they comply with state and federal tax regulations. They specialize in different areas and provide clients with assistance and guidance should they encounter any legal issues with the tax authority.

In this post, we outline three situations where a tax attorney can come in handy as well as what their qualifications should be and their cost. 

Photo by Ekaterina Bolovtsova from Pexels

Tax disputes

A tax dispute can refer to an investigation, audit, appeal, collection motion, or any other disagreement related to taxes.

For example, if you have a dispute with the Internal Revenue Service (IRS) or any state tax agency, then you will greatly benefit from hiring a tax lawyer to assist you with your case preparation. Having legal counsel by your side can help you negotiate the best settlement as well as handle the matter properly so you don’t overpay as a result of your audit.

If the IRS is pursuing criminal charges against you, then hiring a tax attorney is a must. They will defend you in court and ensure you get the best possible outcome, without having to pay enormous fines. In this case, it is essential that the communications with your lawyer are cloaked within the attorney-client privilege which protects you from making damaging admissions or misstatements that can hurt your case.  

Tax relief

If you owe money to the IRS, but you are unable to pay it all at once, then a tax lawyer can help you negotiate a repayment plan that will allow you to pay back your taxes over a certain period of time. 

Unfortunately, people’s biggest fear is that they will never be able to pay off the debt they owe. This is where your attorney can come in handy to negotiate an offer in compromise with the IRS. This offer is a deal your lawyer makes with the IRS which states that you will pay some of the tax debt now instead of the full amount. 

However, in order to be able to do this, you need to first prove that you cannot pay your debt. For this, you will need to gather certain documents to serve as evidence that your attorney will use to build the case for you. 

Business or estate planning

Other occasions when you will greatly benefit from hiring a tax lawyer are business or estate planning.

For example, if you are planning, buying, or selling a business, then there may be some complex tax issues that will require the assistance of a professional. Although business lawyers may have some knowledge in this area, it is better if you work with a reputable tax lawyer to tackle any tax issues that may arise throughout the process. Not only will your attorney help ensure that you comply with federal and state tax laws, but they will also protect you and your business from a costly error. 

Also, if you are planning to leave money to your heirs in your will, it is advised that you first consult with a tax lawyer on how to avoid potential tax problems. This will ensure that your money ends up where it should, with no future issues with the IRS or other state tax agencies.  

Qualifications and cost of tax attorneys

When searching for a tax attorney, it is important that you check for three things:

• A law license;

• Signs of advanced education and specialization;

• A preparer tax identification number (PTIN).

When it comes to how much a tax attorney costs, it mainly depends on the type of tax issue you are dealing with and their level of experience. Some tax lawyers charge by the hour, while others offer a flat rate no matter how long they spend working on your case. 

Photo by Nataliya Vaitkevich from Pexels

Final thoughts

If you are dealing with any tax issues, it is recommended that you hire a tax attorney to assist you in your case. They are experts in the field and will help you negotiate a settlement that best suits you. If you aren’t sure about when a tax attorney would be needed, refer to our post and read about the three situations when you will greatly benefit from having one by your side.