Tax Attorney’s Guide to IRS Audits and Tax Litigation

 Navigating Complex Tax Issues: When to Consult a Tax Attorney

 

A tax attorney is a legal professional who specializes in the field of tax law. These lawyers provide assistance to individuals in managing their finances in a way that optimizes their tax situations while ensuring compliance with tax regulations. Additionally, tax attorneys are skilled at handling disputes with the Internal Revenue Service (IRS) and other tax authorities. Some tax attorneys further specialize in areas such as estate, international, or business taxes.

Tax attorneys typically practice at either law firms or accounting firms. While some may operate as solo practitioners, managing their own businesses, the majority are employed by established firms.

Tax lawyers affiliated with law firms primarily offer guidance to clients on strategies that can result in favorable tax treatment in various circumstances. They may be involved in drafting contracts and other legal documentation necessary to execute these strategies. Additionally, they may represent clients in tax court or other relevant legal proceedings. In contrast, tax lawyers employed by accounting and consulting firms primarily focus on assisting clients in complying with tax regulations.

When is it advisable to engage the services of a tax attorney?

Estate planning: Engage the services of a tax attorney proficient in devising estate planning strategies and handling the associated paperwork to effectively minimize estate taxes. They can guide you in transferring assets to family members, setting up trusts, and employing other tactics.

Starting a business: When starting, buying, selling, or expanding a business, it is advantageous to seek the expertise of a tax attorney who can provide valuable assistance in developing tax-smart strategies for these endeavors.

Tax disputes: In the event of a tax dispute, whether you intend to sue the IRS, a state, or a local tax authority over a tax matter, or if you require a hearing before the U.S. Tax Court, a tax attorney is your best recourse in navigating the complexities of tax law.

Tax relief: If you find yourself burdened with an outstanding balance owed to the IRS or any other tax authority and wish to negotiate or contest it, a tax attorney can proficiently guide you in pursuing various options, allowing for potential tax relief.

What to consider when hiring a tax attorney:

A law license is a crucial requirement for practicing law as an attorney. To determine whether a tax attorney is licensed to practice law in your state, you can utilize your state’s bar association website for verification.

Furthermore, it is essential to consider indications of advanced education or specialization. In most states, graduating from law school is a prerequisite for obtaining a law license. Some tax attorneys possess a master’s degree in taxation, referred to as an LL.M. Additionally, certain tax attorneys hold CPA licenses, which certifies them as certified public accountants.

Lastly, anyone who prepares tax returns for compensation is required to possess a preparer tax identification number (PTIN) issued by the IRS. It is imperative that the preparer signs your tax return and provides their PTIN.

How much does a tax attorney typically charge?

In general, legal services tend to be costly. Tax attorneys offer their services based on either a flat fee or an hourly rate, which is determined by their fee structure and the nature of the services provided. According to Martindale-Nolo Research, a legal marketing and directories firm, tax attorneys typically charge an average hourly rate ranging between $295 and $390. The actual amount may vary depending on factors such as the attorney’s level of experience, which can influence the rate to be either lower or higher.

How to obtain complimentary legal assistance.

You may access complimentary or affordable assistance from a tax attorney by visiting a low-income tax clinic, called an LITC, in your vicinity. These clinics advocate for individuals with income falling below specific thresholds who require assistance in resolving tax issues with the IRS. LITCs are capable of representing you in audits, appeals, and tax collection disputes before the IRS and in court. Furthermore, LITCs can provide aid in responding to IRS notices or rectifying account problems.