Can a Tax Attorney Really Help? A Guide to When and How to Hire One

Can a Tax Attorney Help – Taxes are complicated and stressful, especially if you have a complex tax situation, face a tax dispute, or need legal advice on tax matters. In such cases, you may wonder if a tax attorney can help you. The answer is yes, but not in every situation. A tax attorney is a lawyer who specializes in tax law and can provide you with various services, such as:

Planning your taxes and finances to optimize your tax situation and comply with tax rules
Preparing and filing your tax returns and other tax documents
Representing you in disputes with the IRS or other tax authorities
Negotiating with the IRS or other tax authorities to settle your tax debt, reduce your penalties, or obtain other relief
Advising you on the tax implications of estate planning, business transactions, international dealings, and other matters
Protecting your rights and interests in tax court or other legal proceedings

However, hiring a tax attorney can also be costly and unnecessary in some situations. Therefore, you need to know when and how to hire a tax attorney to get the best results. In this article, we will explain:

When it’s worth hiring a tax attorney
What to look for in a tax attorney
How much a tax attorney costs
How to get free or low-cost legal help

When It’s Worth Hiring a Tax Attorney

There are some situations where hiring a tax attorney can be very beneficial and even essential for your tax issues. Here are some common scenarios where you might need a tax attorney:

You have a complex tax situation: If your tax situation is particularly complex due to owning a business, having significant investments, dealing with multi-state or international tax issues, or having other special circumstances, a tax attorney can provide you with expert guidance and help you navigate the complexities of the tax code.
You face a tax dispute: If you have a tax dispute with the IRS or another tax authority, such as an audit, an appeal, a collection action, or a criminal investigation, a tax attorney can represent you and protect your rights. A tax attorney can also help you challenge IRS rulings in court, file a lawsuit against the IRS, or seek an independent assessment of your case before a US tax court.
You need legal advice on tax matters: If you need legal advice on the tax implications of estate planning, business transactions, international dealings, or other matters, a tax attorney can help you. A tax attorney can also help you devise wealth planning strategies to avoid getting a significant portion of your assets going to the IRS.
You need relief from tax debt: If you owe back taxes to the IRS or another tax authority and cannot afford to pay them in full, a tax attorney can help you pursue various options for relief, such as:
- Offer in Compromise: This is an agreement between you and the IRS to settle your tax debt for less than the full amount owed.
- Innocent Spouse Relief: This is a relief for spouses who are not responsible for their partner’s tax debt due to fraud or other reasons.
- Installment Agreement: This is a payment plan that allows you to pay your tax debt over time in monthly installments.
- Penalty Abatement: This is a reduction or elimination of penalties imposed by the IRS for late filing, late payment, or other reasons.

What to Look for in a Tax Attorney

If you decide to hire a tax attorney, you need to choose the right one for your needs and preferences. Here are some things to look for in a tax attorney:

Education and experience: A good tax attorney should have at least a Juris Doctor degree (J.D.) from an accredited law school and be licensed to practice law in your state. Some may also have a Master of Laws (LL.M.) degree in taxation or be certified public accountants (CPAs). You should also check their experience in handling cases similar to yours and their success rate.
Reputation and reviews: A good way to find out about a tax attorney’s reputation and reviews is to ask for referrals from friends, family, or other professionals who have used their services. You can also check online sources such as websites, blogs, social media platforms, or directories that provide ratings and feedback from previous clients.
Fees and communication: A good tax attorney should be transparent about their fees and communication methods. You should ask them how they charge for their services (hourly rate, flat fee, contingency fee, etc.) and what expenses they may incur (travel costs, filing fees, etc.). You should also ask them how they communicate with their clients (phone calls, emails, texts,)

How to Find a Tax Attorney Near You

If you are looking for a tax attorney near you, you can use various methods to find one, such as:

Asking for referrals from friends, family, or other professionals who have used a tax attorney before
Searching online directories or websites that list tax attorneys by location, specialty, or rating
Contacting your local bar association or the American Bar Association for recommendations or referrals
Consulting with a tax preparer, an accountant, or a financial planner who may have connections with tax attorneys
Visiting the IRS website and using the [Taxpayer Advocate Service] to find a low-income taxpayer clinic that provides free or low-cost legal help

When you find a potential tax attorney, you should contact them and schedule a consultation to discuss your case and evaluate their suitability. You should prepare some questions to ask them, such as:

How long have you been practicing tax law?
What are your areas of expertise and experience?
How many cases like mine have you handled and what were the outcomes?
How do you communicate with your clients and how often?
How do you charge for your services and what expenses do you incur?
Do you have any references or testimonials from previous clients?

You should also bring any relevant documents or information that relate to your tax issue, such as:

Your tax returns and notices from the IRS or other tax authorities
Your financial statements and records
Your legal documents and contracts
Your correspondence with the IRS or other tax authorities

You should compare the answers and impressions of different tax attorneys and choose the one that best meets your needs and preferences.

How to Work with a Tax Attorney Effectively

Once you hire a tax attorney, you should work with them effectively to achieve the best results for your case. Here are some tips to work with a tax attorney effectively:

Be honest and cooperative: You should provide your tax attorney with accurate and complete information about your tax situation and any changes that may affect it. You should also follow their advice and instructions and cooperate with their requests.
Be organized and prepared: You should keep your documents and records organized and accessible. You should also prepare for any meetings or hearings by reviewing your case and asking questions if you have any doubts or concerns.
Be proactive and responsive: You should communicate with your tax attorney regularly and update them on any developments or issues that may arise. You should also respond to their calls, emails, or messages promptly and provide them with any information or documents they need.
Be realistic and flexible: You should understand that tax law is complex and unpredictable and that your case may take time and effort to resolve. You should also be open to different options and solutions that your tax attorney may suggest or negotiate on your behalf.

Frequently Asked Questions (FAQ): Can a Tax Attorney Help? A Guide to When and How to Hire One

How to Save Money on a Tax Attorney

Hiring a tax attorney can be expensive, but there are some ways to save money on their fees, such as:

Comparing different tax attorneys and negotiating their rates: You should shop around and compare the fees and services of different tax attorneys before hiring one. You should also try to negotiate their rates or ask for a flat fee or a contingency fee instead of an hourly rate.
Doing some of the work yourself: You can reduce the amount of time and money your tax attorney spends on your case by doing some of the work yourself, such as gathering and organizing your documents, filling out forms, or researching tax laws and regulations.
Seeking free or low-cost legal help: You may be eligible for free or low-cost legal help from various sources, such as low-income taxpayer clinics, pro bono programs, legal aid organizations, or law school clinics. You can find these resources online or by contacting your local bar association or the IRS.

How to Avoid Needing a Tax Attorney

The best way to avoid needing a tax attorney is to prevent tax problems from arising in the first place. Here are some tips to avoid tax issues:

File your tax returns on time and accurately: You should file your tax returns by the deadline and make sure they are accurate and complete. You should also keep copies of your returns and supporting documents for at least three years in case of an audit or a dispute.
Pay your taxes on time and in full: You should pay your taxes by the due date and in full to avoid interest and penalties. If you cannot pay in full, you should contact the IRS or another tax authority and request a payment plan or an extension.
Keep good records and receipts: You should keep good records and receipts of your income, expenses, deductions, credits, and other tax-related transactions. This can help you substantiate your claims and avoid errors or discrepancies.
Seek professional help when needed: If you have a complex tax situation, face a tax dispute, or need legal advice on tax matters, you should seek professional help from a qualified tax preparer, an accountant, or a tax attorney. This can help you avoid mistakes, save money, and resolve your issues faster.

How to Deal with a Tax Audit

A tax audit is an examination of your tax return by the IRS or another tax authority to verify its accuracy and compliance with tax laws. A tax audit can be stressful and intimidating, but it does not necessarily mean that you have done something wrong or that you will owe additional taxes or penalties. Here are some tips for dealing with a tax audit:

Respond promptly and politely: If you receive a notice of an audit, you should respond within the time frame specified and cooperate with the auditor’s requests. You should also be courteous and respectful to the auditor and avoid being defensive or hostile.
Gather your documents and records: You should prepare all the documents and records that support your tax return, such as receipts, invoices, bank statements, contracts, etc. You should also organize them by category and year and make copies for the auditor.
Hire a tax attorney or a representative: You have the right to hire a tax attorney or another authorized representative to assist you during the audit. A tax attorney can help you understand your rights and obligations, communicate with the auditor on your behalf, and negotiate a favorable outcome for you.
Know your options and rights: You have the right to appeal the auditor’s findings if you disagree with them. You can request an informal conference with the auditor’s supervisor, file a formal appeal with the IRS Office of Appeals, or take your case to the US Tax Court or another court. You also have the right to request an extension of time, a payment plan, or an offer in compromise if you cannot pay your tax bill in full.

How to Avoid Common Tax Mistakes

Tax mistakes can be costly and time-consuming to fix. They can also increase your chances of being audited or penalized by the IRS or another tax authority. Here are some common tax mistakes and how to avoid them:

Filing late or not filing at all: You should file your tax return by the deadline, even if you cannot pay your taxes in full. Filing late or not filing at all can result in interest and penalties that can add up quickly. If you need more time to file, you can request an extension from the IRS or another tax authority.
Missing deductions and credits: You should claim all the deductions and credits that you are eligible for to reduce your taxable income and tax liability. However, you should also make sure that you have the proper documentation and evidence to support your claims. You should also be aware of the limitations and phase-outs that may apply to some deductions and credits.
Reporting incorrect income or expenses: You should report all your income from all sources, including wages, tips, interest, dividends, capital gains, etc. You should also report only the expenses that are related to your income and that are allowed by tax laws. You should avoid reporting personal expenses as business expenses or inflating or fabricating your income or expenses.
Math errors and typos: You should double-check your calculations and figures before filing your tax return. You should also make sure that your personal information, such as your name, address, Social Security number, etc., is correct and matches your identification documents. Math errors and typos can cause delays, discrepancies, or rejections of your tax return.