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Personal Finance Tax Relief

When to Hire a Tax Attorney

When dealing with complex tax issues, seeking assistance from a tax attorney can provide valuable support and peace of mind. They can help you navigate the intricacies of tax laws, ensuring compliance and addressing any concerns proactively.

A tax attorney offers benefits regardless of your financial situation or occupation. They can prevent potential tax issues and help manage current ones, communicating with the IRS on your behalf to save you time and reduce stress. Let’s explore the role of a tax attorney and why you might consider hiring one.​

Should I hire an IRS tax attorney?

Hiring a tax attorney can be smart if you have a complex tax situation, owe back taxes, are facing tax-related litigation or criminal charges, or are looking to structure a business or estate to optimize its tax burden.

While a CPA can perform many of these tasks, a tax attorney may be a better fit in certain scenarios, such as:

If you have outstanding tax debt with the IRS

Unpaid tax debt can lead to serious consequences, including wage garnishment, property liens, and asset freezes. A tax attorney can communicate with the IRS on your behalf, negotiate a settlement (Offer in Compromise), and help set up an installment plan. Their expertise can help you avoid litigation and garnishment, making the process less stressful and more manageable.

If you want to dispute a tax bill

Even with meticulous record-keeping, you may find yourself facing an audit or unexpected tax bill. A tax attorney can explain the situation, identify errors, and represent you if you decide to contest the bill. They can also develop a strategy for settling any deficits and prevent future issues.

If you are making a significant business decision

The structure and management of your business can have a massive impact on your tax obligations. A tax attorney can provide guidance on tax implications, help you reduce your tax burden, and ensure compliance with tax laws, helping you avoid costly mistakes and unexpected tax bills.

If you are making a large investment

Large investments, such as inheritances or lottery winnings, can have significant tax implications. A tax attorney can advise on the best investment strategies and accounts to minimize taxes and ensure your money is managed effectively over time.

If you have a large estate

For those with substantial estates, a tax attorney can help minimize estate and inheritance taxes through strategies like forming trusts or maximizing gift exclusions. Their expertise ensures that more of your estate’s value is preserved for your heirs.

What is a tax attorney?

A tax attorney specializes in tax laws and procedures, often focusing on state, local, personal, corporate, and international taxes, tax litigation, estate planning, and tax-exempt organizations.

They must earn a Juris Doctorate (JD) degree and pass the Multistate Professional Responsibility Exam (MPRE) and the state bar exam to practice. They may work for various entities, including law firms, government agencies, corporations, or tax courts.

What does a tax attorney do?

Tax attorneys offer numerous services, such as filing taxes, advising on pending tax legislation, structuring tax-advantaged estate plans, facilitating transactions, and representing clients in audits or litigation. They also communicate with the IRS on behalf of clients, leveraging their in-depth understanding of tax laws and regulations.

How to choose an IRS tax lawyer

When selecting a tax attorney, consider your specific needs, budget, and how the attorney bills for services. Evaluate potential attorneys by checking their experience, client reviews, and any formal complaints. Confirm whether a retainer is required and ask about payment arrangements. Personal recommendations and thorough research can also guide you to the right professional.

How much does a tax attorney cost?

The cost of a tax attorney varies based on factors including location, experience, and specialization. Hourly rates range from $200 to $400, with total costs depending on the complexity of your situation. Some attorneys offer flat-rate packages for specific services. Free consultations are often available to assess compatibility and needs.

Tax relief attorney vs. tax relief firm

Tax relief firms may offer a more cost-effective option, with low up-front fees and free initial consultations. These firms often require a minimum debt amount to take on a case and may provide a money-back guarantee. Evaluate both options to determine which best suits your needs and budget.

See our guide to the best tax relief companies if you think this option makes more sense for you.