The Internal Revenue Service (IRS) is one of our country’s most powerful government agencies, and when you consider the agency’s role, that fact makes a lot of sense. After all, the IRS oversees the country’s tax laws and collects what taxpayers owe. All these funds go towards keeping the government running.
So, what does that mean for you as a taxpayer? It means that getting on the IRS’s bad side has huge disadvantages. Attempting to subvert the agency’s authority could land you in serious financial and legal trouble. In this situation, a tax attorney can be critical to helping you navigate your tax issues.
A tax attorney can stand between you and the IRS. They can act as your legal advocate when it comes to tax problems, tax questions, and future tax concerns. Keep reading to learn more about what exactly a tax attorney does, why you should hire one, and how they can help you negotiate with the IRS.
What is a Tax Attorney, and What Do They Do?
A tax attorney is a legal expert who has extensively studied the interpretation and application of tax laws. These types of tax professionals are highly skilled and have a solid understanding of tax policies at the federal and state levels.
Tax attorneys have graduated from law school, obtained a license to practice law, and passed the state bar. Equipped with these qualifications, a tax attorney is prepared to be your legal representative and middleman between you and the IRS.
They can also help with state or local tax issues. For example, if you need help with municipal tax issues, you should search online for a “tax lawyer near me” to find local experts.
Types of Situations a Tax Attorney Can Help With
So, what can a tax attorney do for you as your legal representative? Thanks to their qualifications and experience, tax lawyers can assist in several situations including when:
- You’re facing legal consequences due to your tax situation
- You need to resolve tax debt
- You must negotiate with the IRS
- You need to prepare and file your tax returns
- You need to amend tax returns
- You need representation during an audit
- You need help appealing the results of an audit
- You want to appeal a collection action such as a lien or levy
- The IRS has incorrectly placed a lien or levy against your property
- The IRS has incorrectly assessed a tax against you
- You want to create estate planning documents and need to consider the tax implications
- You’re starting, selling, or buying a new business
- You don’t understand a tax situation and need advice
Overall, these experts can help you navigate complicated tax problems, prepare tax returns, file your taxes, and maximize your returns in a way that benefits you.
They can act as your representative with the IRS so that you don’t have to deal directly with the agency, and they protect your rights as you navigate the complexities of our nation’s tax system.
Get more details on exactly how your tax lawyer could help in various situations below.
Facing Legal Consequences as a Result of Your Tax Situation
The number one situation that warrants the use of a tax attorney is when you could face legal consequences as a result of your current tax situation. When your taxes are significantly delinquent, the IRS has several ways to penalize you.
They may garnish your wages or levy your bank account. If they believe that you have committed tax fraud, they may refer your case to the Department of Justice to bring criminal charges against you.
If you’re worried about these types of consequences, then it’s time to consult with an attorney.
Seeking Financial Relief from Tax Debt
When you owe the IRS a significant amount of money, you should contact a tax attorney to get informed about your options before the IRS starts involuntary collections. An attorney will direct you to several different options that can help you get financial relief.
Experiencing a Tax Dispute
If you’re experiencing a tax dispute with the IRS, then it’s advised you hire a tax attorney as soon as possible. You don’t want to go up against the IRS on your own. You need an expert who has an in-depth understanding of tax codes.
Looking for Tax Advice
If you’re simply looking for solid and reliable tax advice, then a tax attorney is a great resource to take advantage of. You can consult with a tax attorney at any time about any tax questions you have, and you can use their advice to make informed decisions about your future.
Can Attorneys Negotiate With the IRS?
Per Internal Revenue Code Section 7421(b)(2), the IRS must stop talking to a taxpayer if they say they would prefer to consult with a tax attorney, a CPA, or an enrolled agent regarding their tax situation. The main reason for this law is to protect the taxpayer, who is often at a disadvantage when it comes to negotiating a tax debt or another tax matter.
The IRS is well-versed in the law, but the average taxpayer isn’t. The IRS must allow taxpayers to seek legal counsel when they request it.
You might wonder, though, can a tax attorney negotiate with the IRS on a taxpayer’s behalf? In short, the answer is ‘yes’. Your tax attorney can represent you while communicating and negotiating with the IRS. Depending on your financial situation, you may be eligible for some form of compromise with the IRS.
How Does Power of Attorney Work?
There is one specific step you must take if you want to give your tax attorney the full authority to represent you in front of the IRS and negotiate on your behalf. You must officially file a power of attorney, otherwise known as IRS Form 2848.
Form 2848 gives the individual named in the form (your tax attorney) the legal authority to receive your tax information for the tax years on your form and to represent you in front of the IRS. Without this important document on file, your tax attorney won’t be able to legally talk to the IRS about your tax situation.
Keep in mind that these forms do not absolve the taxpayer from legal liability. You will still be fully accountable for your tax situation.
Can an Attorney Lower Your Taxes Owed?
It is possible, but not a guarantee, that your tax attorney might be able to reduce the overall tax debt you owe to the IRS. The main way they’d be able to secure a reduced bill for you would be to take advantage of existing IRS tax debt forgiveness programs such as:
Your lawyer will not have any more negotiating power than you as an individual taxpayer, but they do have the advantage of knowing about the various programs the IRS uses to provide relief to taxpayers. They’ll also be better positioned to leverage the law to your advantage where possible.
For instance, if the statute of limitations on some of your debt has already passed, then your lawyer may be able to get the IRS to cease collection efforts by pointing out that they have no legal basis to seek out the funds anymore.
Determining if You Need to Hire an Attorney
Now that you have a better understanding of what a tax attorney can do for you, it’s up to you to decide if you think you need to hire an attorney or not.
As a taxpayer, you have the authority and ability to take advantage of any of the IRS programs you qualify for without the assistance of a tax attorney. You’re also not obligated to hire an attorney to negotiate with the IRS or resolve a tax situation.
Going up against the IRS on your own is no easy feat, though, especially if you’re not well-versed in the law, tax codes, or your options. A tax lawyer will help level the playing field, ensure your rights are upheld every step of the way, and inform you about your options.
How to Find a Tax Attorney
Before you hire the first lawyer that pops up when you Google “tax attorney near me,” there are a few things you need to know. While tax lawyers are some of the most specialized tax experts available, not all attorneys are able to provide the same level of tax representation.
You deserve top-quality legal representation from an attorney who will give your case the time it deserves. You will be best served by an attorney with experience in your specific tax issue.Once you know what tax lawyers offer the services you are looking for, dive deeper into their experience by checking up on their past case results.
You’ll also want to see what past clients say about the lawyer or law firm by reading reviews and testimonials. From there, you’ll want to schedule a consultation to make sure the attorney is a good fit and has the time to take on your case.
Tax Attorneys vs CPAs vs. Enrolled Agents
There are several benefits associated with working with an IRS lawyer. Still, you’ll only want to hire these highly qualified tax experts when you need specialized legal and tax advice.
Sometimes, your tax situation might require the expertise of a different type of tax professional.
For instance, certified public accountants (CPAs) are good tax experts to hire if you need help crunching numbers and making a budget for tax time. CPAs are most skilled at accounting matters. Some tax attorneys are dually certified as CPAs.
Enrolled agents (EA) are individuals who are authorized to represent taxpayers in front of the IRS. To become an enrolled agent, a tax professional must pass an extensive three-part IRS test or be a former IRS employee. Then, they must complete continuing education courses every few years. There are no preliminary education requirements for enrolled agents.
Do Tax Attorneys Offer a Free Consultation?
Some tax attorneys offer free consultations, but most do not. If they don’t offer free consultations, they’ll generally get a short overview of your issue. Then, if they can help you, they’ll charge you for a consultation, during which they’ll review your options.
In contrast, many other types of attorneys offer free consultations, but most of these firms also work on a contingency fee basis, meaning they don’t get paid until the case resolves. While that sounds attractive to clients, it’s important to recognize that the lawyers who offer these arrangements usually work on personal injury claims and lawsuits.
Tax attorneys do not usually work on these payment schedules because there is no lawsuit to resolve or settlement to pursue. When factoring in the tax attorney cost and payment fee, it makes sense why consultations usually are not free of charge.
So, how much is a tax attorney consultation? That depends on the specific firm you choose to work with! To learn more, contact us to ask about our fees for an initial meeting. It’s important to note that at Wiggam Law, we initially offer a free consultation with our Client Services Coordinator to ensure we can serve your needs before you pay for a consultation with one of our attorneys.
How Much Will it Cost to Hire a Tax Attorney?
The answer depends on the specific firm you work with and their payment schedule. Some attorneys work on a flat-fee basis, while others work on an hourly fee. The payment schedule that will work best for you depends on the complexity of your case and the extent of your tax needs.
Hourly billing will generally result in the cost matching the complexity of the work. Simple matters take less time, so they cost less. Complex matters require much more time, energy, and effort, and the billings reflect that. Flat-fee billing will generally result in the client being charged based on value, not the time involved. You should ask any tax attorney you speak with about their billing model and why they chose it.
Are Tax Attorneys Worth it?
It’s often worth the investment to pay for an attorney’s assistance with tax matters. They are experts in dealing with tax matters and can give you peace of mind about your tax problem. This is especially true if you’re dealing with a lot of fees, trying to get a settlement on your tax bill, facing complicated audit issues, or navigating complex business, estate, or trust taxes.
Are You Looking for Tax Resolution Attorneys You Can Rely on?
When you’re experiencing tax problems that have put you at odds with the IRS, the help of a tax attorney is invaluable. Not only can a lawyer help you handle tax problems and tax debt, but they can also help you avoid potential tax problems in the future, too.
Are you currently looking for a tax resolution firm to assist with your tax questions and concerns? Then, our team would love to hear from you to see how we can help. We know how stressful and complex tax issues can be, but you can rely on our legal expertise to help you easily navigate your tax situation.
Don’t let taxes overwhelm you. Instead, schedule a consultation with our team today to get started on resolving your tax situation.