When you’re suffering the burden of tax debt, it can be overwhelming to have to deal with the IRS. In some cases, trying to handle it yourself can make the situation worse. You’ll be juggling a lot of documentation, deadlines, and strategies.

Whether you’d like to discuss settlement options or are considering bankruptcy, you’ll need a qualified tax expert to help. Here’s everything you need to know about choosing a tax lawyer for your case. 

Why You Need a Tax Lawyer

The tax code is incredibly complicated, so no two taxpayers’ situations are alike. That means your tax debt issue is also unique. A tax lawyer can fully assess all the factors in your case, then find the best course of action.

The IRS is not always forthcoming with details about your debt or why/when they will impose a lien or levy. Factors such as your date of debt assessment and the imposed penalties vary widely. Simply by contacting the IRS about a debt, you may trigger new developments in your case. If you forget to send key documentation on time, you could wind up with more penalties or, worse, seizure of your assets.

Once you receive a Final Notice to Levy, you only have 30 days to respond. When the clock starts, you’ll need to gather the appropriate documents and seek resolutions quickly. If you need more time to pay or you want to be named “Currently Not Collectible,” you will have greater success with a tax lawyer.

Of course, dealing with tax debt is very stressful as well. The IRS’ debt collectors may intimidate you or misrepresent your options. By hiring a tax lawyer, you create a buffer between yourself and the IRS. They can organize your documents and gather proof on your behalf, and they’ll handle all communication with the IRS.

This way, you’ll be less likely to be overwhelmed or swayed by the IRS’ threats. Instead, you can trust that your lawyer will handle the situation.

What Can a Tax Lawyer Do?

Like any sort of lawyer, a tax lawyer’s job is to negotiate on behalf of their clients. They will communicate with the IRS to resolve your situation.

If you have a large amount of back taxes or are facing potential liens or levies on your bank account, you probably need a tax attorney. The IRS relies on methods such as wage garnishment, property seizure, and other levies to collect unpaid taxes. If they believe you don’t intend to pay, they have virtually unlimited power to use these methods. Unfortunately, it’s not always easy to represent yourself in good faith.

That’s where a tax lawyer comes in. They can clarify your situation, and help you achieve a possible solution, such as:

  • Installment agreements
  • Offers in Compromise
  • Currently Not Collectible status
  • Settlements
  • Bankruptcy

They may also be able to stop tax levies and liens by assuring the IRS of your intent to pay or resolve the issue.

If you have been accused of tax fraud, you absolutely need representation. The IRS does not care whether you underreported income or claimed the wrong deductions intentionally or accidentally. A tax lawyer thoroughly understands the tax code, so they can argue your defense and seek a compromise. 

Tax lawyers can also help with complex tax situations where you may be experiencing an undue burden or liabilities. If you’re dealing with trusts or estates, it’s a good idea to have a tax lawyer by your side. 

What is the Difference Between a Tax Attorney And a Tax Advisor?

If you already have a tax advisor such as a Certified Public Accountant (CPA), you may be wondering if they can help with your tax problem. Unfortunately, they usually can’t.

A CPA or tax preparer specializes in complicated tax situations, such as estates or business liabilities. Their role is to minimize your liability and help you avoid tax controversy. They’ll also help you make good financial decisions and maximize your deductions and benefits.

So, it’s a good idea to have a tax advisor, as they can help you avoid situations with tax debt or fraud. However, if you’re actually in trouble with the IRS, always hire a dedicated tax attorney. They are legal professionals who know how to resolve disputes.

In short, a tax advisor provides prevention, while a tax attorney provides intervention. Tax preparers will help you plan your tax payments and financial health, but tax attorneys will help get you out of hot water.

What Questions Should I Ask a Tax Attorney?

Once you’ve decided you need a tax attorney, it’s important to vet them thoroughly. You need a lawyer who can handle your unique tax situation. Here’s what you should ask them.

How Long Have You Been Practicing?

Once a lawyer passes the bar, they are a qualified legal professional. However, you may want a more seasoned tax attorney, depending on your situation’s complexity. 

Also, be sure that they have passed the bar in the state where you live or work (or run your business, if applicable.) Ideally, they are a member of the state bar association and can represent your interests in that state.

What Is Your Specialty In Tax Law?

Tax law is a broad field, so many tax attorneys have dedicated themselves to specific areas. Check that your attorney specializes in the relevant tax laws. If you’re dealing with unpaid payroll taxes, choose someone experienced in business tax law. If you’ve been audited and the IRS penalizes you, you need a tax attorney who specializes in tax controversy. 

Then, make sure they can handle your particular needs. For example, some business tax lawyers focus on resolving debt, while others help you navigate complex liabilities or ownership concerns. 

How Do You Bill For Your Services?

Some tax attorneys charge a per-case flat fee, while others bill hourly. In situations where you need ongoing support, such as estate planning, you’ll probably want to book a lawyer on retainer, meaning you pay a recurring monthly fee.

Also, ask about extra costs you may be charged, such as copying, postage, and other administrative tasks. These aren’t necessarily dealbreakers, but it’s important to make sure your budget can handle them.

How Will We Keep In Contact?

One primary benefit of hiring a tax attorney is that they will communicate with the IRS on your behalf. Of course, you’ll want to be kept in the loop.

Ask what you can expect as far as communication. Will they contact you with updates? Will you have scheduled meetings? Can you speak directly to the lawyer or will you be talking to a paralegal or assistant? Again, there are no right or wrong answers, but you should find someone who meets your needs.

Wrapping Up

Hiring a tax attorney can help you resolve your tax situation — and retain your sanity. Qualified tax lawyers understand the tax code and how to negotiate and communicate with the IRS. Whether you’re burdened with tax debt, have fallen into tax controversy, or want expert legal advice in complex tax matters, a tax attorney is a valuable resource. 

By choosing the right lawyer, you can rest assured that your issues will be handled professionally and accurately. That, in turn, can protect your assets and resolve conflicts with the IRS.

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