3 Signs that you Should Hire a Tax Attorney, not a CPA

At times, it may be hard to tell what your CPA can assist you with and what has to be done by an attorney. In terms of taxation, both are experts, but in different ways.


The Internal Revenue Service (IRS) may identify anomalies in your tax filings or conduct an audit, in which case you’ll require the services of a tax attorney in addition to the CPA who prepared and submitted your taxes appropriately. In any case, it’s helpful to have both specialists on your side.

What does a Certified Public Accountant do?

A CPA is a professional with extensive training in accounting and finance. To become a Certified Public Accountant (CPA), candidates must have completed at least 150 hours of undergraduate schooling.


In addition, every three years, they must complete 120 hours of continuing education. Thus, they are regarded as some of the best tax preparation professionals in the business. While all CPAs are accountants, there are several different types of CPAs. The path to becoming a Certified Public Accountant (CPA) is more complicated than that of a typical accountant.


The services of a CPA are seldom required by the typical taxpayer, but they are often required in more complicated situations. While still lowering your tax obligation and increasing your advantages, CPAs know how to comply with federal requirements. If you want to create a long-term tax strategy and need help adhering to it, establishing a close working relationship with a CPA may be beneficial. Beyond tax preparation, CPAs typically provide a wide range of other services to their customers. The following are some of the other services they may offer:


  • Review of financial documents
  • Maximizing the deductions
  • Accounts payable and receivable


Many individuals prefer to have a regular CPA to turn on for advice and assistance. It is possible to consult them if this is not the case for you:


  • preparing and submitting your tax returns
  • Formally applying for a financial aid
  • an internal investigation has been completed
  • If you’re looking at your tax payments and owed amounts,
  • Their knowledge and experience will be of the utmost assistance to you in dealing with such circumstances.

What is the role of a tax lawyer?

In addition to CPAs, taxpayers may benefit from the services of a tax attorney. In the case of an audit, CPAs are theoretically authorised to defend you before a court, but a tax attorney is usually a better alternative in instances where you may be embroiled in a dispute with tax officials.


Tax lawyers, like CPAs, must finish a rigorous educational programme before becoming certified to perform their duties. The next step is to get a Juris Doctor degree and prepare for the state bar test in the state where you want to practise law. Once a candidate has passed the bar test, he or she must maintain their licence by attending regular continuing legal education courses. Then there’s the Master of Laws in Taxation, which many tax lawyers seek to deepen their expertise in the discipline.


There are some tax lawyers who specialise in defending clients in the event of an audit by the IRS, EDD or any other federal tax authority. While tax lawyers may specialise in different areas, one thing they all have in common is their skill in tax disagreement and dispute settlement.


Working with a tax attorney is advantageous since only tax lawyers have an attorney-client privilege that protects communication between the attorney and the client. By granting this privilege, the Internal Revenue Service and the California Department of Tax and Fee Administration are preventing the public from learning information that has been supplied to lawyers in confidence.


As previously indicated, tax lawyers provide a wide range of services to their customers. A tax attorney may be needed for one or more of the following reasons:


  • The Internal Revenue Service conducts tax audits.
  • Defending against tax crimes
  • Transparency in the ownership of foreign bank accounts and businesses
  • Transacting commerce across national borders
  • Tax controversies and the collection of IRS taxes

However, a small firm may need the services of an experienced tax lawyer in addition to a competent CPA.


You should hire a tax attorney if any of the following three indicators apply to you:


The Internal Revenue Service has sent you a Notice of Deficiency.

When it comes to Tax Court, a CPA or EA may represent you in your case, but they may not have all of the required tax skills to do so. Knowing the law and being able to present a compelling case are the hallmarks of a tax lawyer.

You’re debating whether or not to merge your business or seek outside finance.

If you’re looking to build your company quickly, you must start with a solid foundation. For those who want to pursue venture capital investment or other means of obtaining huge funds, this is critical. Because of this, you must obtain the advice of a tax attorney before merging with another company, even if it is between two small enterprises. From the beginning, your tax structure has an impact.

You’re working with other people.

If you’re starting a business with more than one investor, you’ll want to carefully consider your tax structure to ensure that each investor receives the most possible tax advantage. Do you form a partnership, a limited liability company, a corporation, or an S corporation? A tax lawyer knows the difference between partnership tax and corporation tax.


The Tax Code governs many organisations, and there are several fine points to be aware of about the organization’s structure, board member selection, and prohibited transactions. A CPA is unlikely to be able to help you through these nuances of nonprofit tax law. The work of a CPA and that of a tax lawyer sometimes overlap, however, a CPA cannot always substitute a tax lawyer in all situations. For most of us, the choice to employ a tax lawyer should be made sooner rather than later, since the tax deadline is only three months away.