You open yet another piece of mail from the IRS, and your heart begins to race. Just as you suspected, the letter is threatening you to pay your delinquent tax bill or pay the price.
Unfortunately, you are in a financial bind, so tackling your tax debt simply isn’t an option. The good news?
You don’t have to go toe to toe with the IRS all on your own. A tax expert can stand by your side and help you to settle your tax debt.
The question now is, should your gladiator be a Certified Public Accountant (CPA), or should it be a tax attorney? Does it matter when you have problems with taxes?
Absolutely!
Certified Public Accountant or Tax Attorney for Tax Debt Relief?
Here are just a few differences between them:
1. Differences in Education
i). CPA Qualifications
A CPA, or a certified public accountant, is a tax expert who has completed a minimum of 150 semester hours of accounting education at a higher education, which is the equivalent of five years of schooling.
As a result, CPAs are highly knowledgeable about the basics of tax preparation.
ii). Tax Attorney Education
However, a tax attorney, unlike a CPA, has a law degree, usually attained through seven years of study following high school, which includes completing law school.
As a result, tax attorneys know much more than tax preparation: they also understand the tax law inside out.
For this reason, they are an excellent choice if you are facing levies and liens, or if you owe thousands of dollars in back taxes—serious problems that involve the tax authorities.
Other legal tax problems a tax attorney can help you with include dealing with returns that haven’t been filed, stopping wage garnishment, and reaching a compromise with the IRS.
If you hire an accountant to help you to deal with the IRS, you won’t have access to the type of top-level law education you would benefit from with a tax attorney when communicating with the IRS.
2. Differences in Credentials
i). CPA Qualifications
In addition to completing higher education, CPAs must have also passed an intensive CPA examination called the Uniform CPA Exam. Only then are they granted the CPA designation.
However, just because an accountant is certified doesn’t mean they are well equipped to represent your legal and financial best interests when you’re dealing with IRS officials.
ii). Tax Attorney Qualifications
A tax lawyer must pass the bar exam through the American Bar Association before they can be licensed as a lawyer. With that license, they are prepared to aggressively deal with the IRS if you’re facing an adverse tax action.
When you hire an accountant instead of a tax lawyer to help you to settle your tax debt, there is no guarantee that the professional you’re working with is sufficiently equipped to work with the IRS on your behalf.
An attorney license is a proof that the professional you’re hiring is very knowledgeable about tax law and thus can help you to effectively pursue a positive outcome in your dealings with IRS officials, the enforcers of the law.
3. Differences in the Ability to Face Off with the IRS
i). CPAs versus the IRS
Another reason to have a tax lawyer on your side before you contact the IRS is that attorneys have the wherewithal to go against the IRS. CPAs are largely accountants with proficiency in crunching numbers versus legal negotiations.
ii). Tax Attorneys versus the IRS
A tax lawyer has strong expertise in handling tax controversies and in driving dispute resolution.
That’s because they have completed years of training and education to contend with parties like the IRS. So they are more than comfortable with representing clients during proceedings involving this government agency.
In light of the above, an accountant may not be your best option if you need assistance with an IRS tax audit. This is especially true if you are a business person, as your financial and tax situations are generally more complicated than those of traditional wage employees.
When Do You Know It is Time to Consult a Tax Lawyer?
As you explore your options when facing IRS tax problems, you may be tempted to hire a CPA, thinking that this may be a cheaper option for you.
However, you may end up finding yourself in deeper IRS trouble as a result. And the outcome of this could be far costlier than it would have been had you hired an attorney from the start.
It is especially a smart idea to consult an attorney if your complex tax debt case involves revenue officers or tax agents. In these situations, a tax attorney can help with safeguarding your legal rights as well as give you advice regarding how to avoid getting into more tax trouble.
If you are facing tax fraud allegations or similar legal issues, the representation of an attorney can be critical in the discussions and negotiations you have with federal officials.
In some situations, CPAs are willing to try to tackle tax problems. However, reputable tax attorneys are often the ones who end up taking on their clients if their tax debt issues prove too complicated for them to handle sufficiently.
Options When Dealing with IRS Issues
The good news overall is that the IRS is generally willing to work with delinquent taxpayers based on their financial situations.
Having a tax attorney in your corner will only further help you to achieve the type of positive outcome you desire, whether you’re an individual or a business owner.
A CPA may be useful for simple tax issues, but if you are dealing with complex legal matters, then a CPA is unlikely to help. In those cases, the CPA will likely recommend a tax lawyer for you to go to.
CPAs are not trained to go head-to-head against the IRS over the phone or in the courtroom. They are accountants who have been trained in accounting.
Find a tax attorney who has experience working with IRS officials so that you can finally resolve your IRS troubles as quickly, efficiently, and cost-effectively as possible.
Katie Tejada writes about the latest developments in socially responsible (and irresponsible) tax laws. She is also the Content Manager for Delia Law.
