December 01, 2021
When it comes to choosing the right professional to help you with your tax resolution issues, who do you go to – a tax attorney or a CPA? Both types of professionals can help you with various tax issues, but only one is better than the other when it comes to tax resolution. Which professional should you hire? What are the differences between them? How do you know if the professional you’re reaching out to is properly trained and can help you with your tax issues? We’ll answer all of those questions and more here.
In many cases, a tax attorney starts out their future career in the same manner as a certified public account, or CPA, with a bachelor’s degree in accounting. Some may major in math, pre-law, or business as well, depending on the school and the courses required to obtain a degree. After graduating with a bachelor’s degree, the next step involves taking the LSAT, or Law School Admissions Test. This test is required to get into law school, where they spend three years learning the intricacies of law in order to pass the bar exam.
Once the state bar exam has been passed, a tax attorney’s path to a job isn’t quite over. They often work for a law firm that specializes in taxes in order to obtain the necessary experience, usually balancing further study at the same time. Yes, many tax attorneys have advanced degrees in accounting, such as master’s degrees or doctorates, which further enhances their knowledge of the tax code. This helps them adhere with the requirements of their state bar association, which require continued learning in order to stay current and allowed to practice as an attorney.
What Can a Tax Attorney Do?
Although tax attorneys are well versed in accounting, they have a specialized job. If you need someone to represent you in court against the IRS or need to correspond with the IRS in writing, then you’ll need a tax attorney. While a tax attorney may be able to handle standard accounting tasks, like bookkeeping, you wouldn’t hire them to do so. They specialize in handling the intersection of the law and accounting, not standard accounting.
Some examples of situations where you’d hire a tax attorney include if the IRS is garnishing your wages and you’d like to work out a payment plan with them instead or if the IRS has placed liens or levies on your property as a result of your unpaid taxes. A tax attorney can handle your communication with the IRS in these situations, acting as a go-between in order to ensure that the situation works out beneficially for both parties.
In addition, if you owe a lot of money in back taxes and want to offer the IRS a settlement or work out a payment plan, then you’d go to a tax attorney, not a CPA. They can handle many different issues that you have with the IRS, helping you work out deals or remove levies and halt garnishments.
Outside of IRS issues, a tax attorney can also prepare estate documents and set up trusts in order to keep your money safe for your next generation. They are fully prepared to handle these documents. Although a CPA may know exactly how much money is in your business bank accounts, your tax attorney can handle the succession planning for that family business.
Certified Public Accountant (CPA)
A certified public accountant (CPA for short) is someone who has a bachelor’s degree in accounting. The degree program for CPA training usually takes five years, as it includes more credit hours and classes than a standard bachelor’s degree. This means that a CPA has not only spent more time in a classroom, but they also have taken a number of specialized courses that focus on accounting. In addition to a bachelor’s degree in accounting, many CPAs go on to earn a master’s degree in the subject in order to further hone their knowledge.
After receiving their initial bachelor’s degree in accounting, those wanting to become a CPA must pass the certified public accountant exam. The test consists of four parts, including regulation, financial accounting and reporting, business environment and concepts, and audit and attestation. Hopeful CPAs have a total of 18 months in which to pass all four parts of the exam. Also, they need to spend quite a few hours, 1,800, to be exact, working under a licensed CPA in order to become licensed themselves. After they are licensed, they need to get 120 hours of additional training and continuing education every three years in order to maintain their license.
What Can a CPA Do?
With all of that training, it’s clear that a CPA is a highly trained and certified (hence the title) tax professional. They can handle a number of different accounting tasks, including filing taxes and helping you by finding all of the tax credits and deductions that you may qualify for. CPAs need to keep up with all of the changes to the tax code, so they know exactly what’s involved in submitting a personal or business tax return. In addition, they can assist companies with their payroll, do standard financial document prep, take on every day bookkeeping tasks, and even provide advice on budgeting and general or specialized financial planning.
If you are setting up or buying a new business, a CPA can help with all of the financial documents, and they are even qualified to help you find the best possible business loan for your new or existing company. Have questions about your business structure or wondering if you need to use an accrual or cash accounting system? Ask a CPA. They are also trained to help clients who have been selected for an IRS audit, and can even keep an eye on your business finances to prevent fraudulent activities from occurring. As you can see, a CPA is a highly trained tax professional who can tackle a number of different tasks.
The Difference Between a Tax Attorney and a CPA
Although both a tax attorney and a CPA may have a degree in accounting, that’s really where the similarities end. Both are highly trained professionals, but in different ways. A tax attorney knows tax laws and can represent you in a courtroom or correspond with the IRS on your behalf when you’re dealing with legal issues like owing back taxes or dealing with liens and garnishments. A tax attorney might be able to handle your business’ tax return, but that would be a waste of their specialized skills.
On the other hand, a CPA can indeed handle your business’ tax return, as well as your personal one. They know the ins and outs of the tax code and can find the best deductions and credits for you, helping you pay less in taxes (legally, of course.) When it comes to corresponding with the IRS regarding back taxes owed or needing representation in court, you wouldn’t want your CPA to handle those things. Instead, you would reach out to a tax attorney.
In many cases, a CPA and a tax attorney work together. If you’re being audited and want legal representation, then your tax attorney will get those records from your CPA. Since one keeps and prepares the information, while the other is skilled at representing you legally in front of the IRS, it makes sense that they would speak to one another and share the information (with your permission, of course) that they need in order to get the matter cleared up or reach a fair conclusion. This is why it’s good to have a working relationship with both types of professionals, a tax attorney and a CPA.
Choosing the Best Professional for Tax Resolution
If you need help resolving your tax issues with the IRS, then you’ll need both types of professionals. A CPA can go over your financial records and previous tax returns to ensure that everything was done correctly, and they can even submit an amended return if necessary. A tax attorney, on the other hand, can speak to the IRS on your behalf, working out a payment plan or deal in order to provide you with the best possible outcome. As you can see, both can work together in order to help you reach a tax resolution.
Contact Us Today
If you need to work with the IRS on tax resolution and need the help of both a CPA and a tax attorney, or have any questions about the tax resolution process, then please reach out to the tax advisors at Enterprise Consultants Group. We can answer your questions, discuss your rights, and provide actionable options. Please contact us online or at (800) 575-9284 today to schedule a free and confidential consultation to see how we can help you.
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