There is a difference between an attorney and an accountant. Both are here to help you when you need it. However, when it comes to fighting the law, an attorney is the person you need by your side. If you are facing a complex tax situation, then, you require a tax attorney. The difference between a tax attorney and an accountant is that a tax attorney can fight for your rights in court. The thing about tax is that you never know when a complicated tax situation could arise. There are some people that never have to deal with such a situation. However, it is common for people to end up in a tax crisis at least once in their life. You never know when you might end up needing a tax attorney. There are some situations where you should know that you need to hire a tax attorney.
A tax attorney is an attorney who specializes in the technical and complex field of tax law. The attorney is best at handling legal, technical, and complex issues that are associated to your specific tax situation. If you have a tax problem, you can consult with a tax attorney to ensure that you have someone to deal with the problem. If you are wondering when to hire a tax attorney, then the following situations will give you a better idea.
- Taxable Estate
If you anticipate a taxable estate upon your death, you need to hire a tax attorney. There is a specific total value of estate that is not taxable depending on the state you reside in. However, if the total value of your estate exceeds the threshold, the estate would be taxed. The total value threshold also depends on your marital status. If you are married, then you have a higher threshold as compared to if you are single. There is an estate tax that has to be paid on the estate by your heirs. Hence, it is a good idea to hire a tax attorney if you believe that your estate would be taxed. The tax attorney would help devise strategies for estate-planning to provide you with the help you need to ensure that your estate is value for less than the exemption threshold. Thus, your heirs would avoid having to pay a huge amount of the estate as taxes.
- Business Incorporation
Anyone planning to start a business needs a tax attorney. You need to know which type of business entity to set up in order to take advantage of the lowest amount of tax. Whether you want to form a company or work as a sole proprietor, you need a tax attorney to provide you with expert legal opinion to ensure that you are aware of the tax ramifications. The tax attorney will advise you on tax treatment and the different structures available for starting a business. The attorney will also inform you about any of the non-tax issues that you might have overlooked.
- Conducting International Business
If you are involved in international business, you need to know about tax treatments, contracts, and other legal issues. There are many things that need to be considered when it comes to running an international business. By hiring a tax attorney, you will be better prepared to continue running your business. There are imports, exports, and duties that need to be taken into account.
- IRS Audit
If you have received a notification from IRS for audit, you need to contact a tax attorney as chances are that you might end up needing legal representation. There is a possibility that a situation might occur where you would need a tax attorney to help you successfully negotiate a favorable settlement. It is not an easy task to negotiate with the IRS and you need a professional by your side. The tax attorney will help ensure that you end up paying less. The attorney will make sure that an installment agreement, penalty abatement, or compromise is reached. You should keep in mind that is very rare for a compromise offered to the IRS to be accepted. It is important that you have a tax attorney to tell your side of the story such as one which involves great hardship wherein you have few assets and no money.
- Criminal Charges
In case the IRS is seeking criminal charges against you, you will definitely require a tax crisis attorney to help deal with such a difficult situation on your behalf. It is impossible for you to handle such a situation on your own and you could use all the support that you can get. Criminal charges are a serious situation and should not be taken lightly. The IRS has complete authority to pursue criminal charges against you in certain situations. This might due to income tax evasion as every person is required to pay income tax by law and you do not do so, the IRS would send you a notice. If you do not respond to the IRS within the specified time, the IRS will take action against you. Moreover, if you are accused of tax fraud, you will need a tax attorney such as a Reno Tax Attorney to fight for your rights. The last thing one wants is to be slapped with huge fines or having to spend time in jail.
- Communication with the IRS
Only a tax attorney is qualified to communicate with the IRS on your behalf. This is why you need to hire a tax attorney. The attorney will require you to sign a power of attorney which grants them the right to represent you. It will help take most of the stress away as having to deal with the IRS on your own is not an easy task.
- CP Notice
If you have received a CP notice, you will need to hire a tax attorney. A CP notice is a letter that is issued from the IRS which informs you of your due balance. There is a reminder notice and if you do not pay on time, legal action could be taken against you. In order to avoid such a situation, it is a good idea to consult with a reputable tax lawyer.