Tax Relief Attorney: When to Use IRS Tax Attorneys for Tax Relief
Tax laws are complex and for that reason, there are many types of tax professions that have spawned off of the endlessly evolving tax code. Choosing the right type of tax professional for your particular tax situation is an important decision because it can help ensure you the best outcome and can save you money.
A tax relief attorney provides certain benefits that other tax professionals may not. Below are some benefits of using a tax relief attorney, typical situations they can be utilized for, and tax solutions they can help with.
Why Do You Need a Tax Attorney?
A tax attorney can help you deal with the IRS and various state tax agencies. They understand the resolution options for a wide range of tax issues, and they work hard to ensure you get the best arrangement for your situation.
The IRS can be very intimidating, and the tax rules are extremely complex for individuals to understand. Whether you have unfiled returns, owe back taxes, are dealing with garnishments or liens, or have other IRS problems, a tax attorney can help you find a solution.
You can start your search here of top-rated local tax attorneys that help with tax problems. We have created a system to show taxpayers the best attorneys to help with their unique tax problems. You can easily filter by your particular problem or desired solution and for the specific tax agencies involved.
What Do Tax Attorneys Do?
A tax lawyer helps you resolve tax problems with the IRS and various state tax agencies. They use their knowledge of the tax and legal code to ensure that you get the best results possible and that you do not face an unfairly high tax liability. They can also represent you in court.
What Are the Qualifications of a Tax Attorney?
Tax Attorneys or tax lawyers earn a bachelor's degree plus a Juris Doctor (J.D.) degree. Many also continue their education with a Master of Law in Taxation (LLM) to gain specialized knowledge about tax laws. Additionally, tax attorneys must pass the bar exam in their state.
Do Tax Attorneys Specialize?
Tax attorneys have an in-depth understanding of the federal tax code as well as extensive knowledge of the tax laws in one or more states. Most of them who specialize in tax law deal with the following:
- Audit representation
- Delinquent tax returns
- Unfiled tax returns
- Installment agreements
- Offers in compromise
- Penalty relief
- Tax levy release
- Tax lien release
- Wage garnishment removal
When choosing a tax attorney, look for someone who has experience with your particular tax concern as well as with the resolution method you want. If you have both state and federal tax issues, make sure the tax lawyer is experienced with the tax agencies in your state.
How Can a Tax Attorney Help You?
An IRS tax lawyer can help you with the following:
- Researching your case
- Communicating with the IRS
- Negotiating tax settlements
- Representing you in court
- Saving you money
Most tax lawyers start with a free consultation where you can assess if they are a good match for your needs. You will tell them about your tax problems, and they will outline how their services can help you.
Benefits of a Tax Relief Attorney
The main benefit of working with any tax pro is that they help you negotiate with the IRS. When you choose a tax attorney, in particular, you also reap the following benefits:
- Tax Attorney-Client Privilege: The attorney-client privilege is a legal concept that is used between attorneys and their clients. This concept makes all communication kept strictly confidential. This concept is used because it encourages clients to disclose all relevant information to their attorney. If a client discloses all information to the attorney, the attorney can provide better advice and will likely be able to represent the client in a more effective manner. This is a privilege that is not offered between accountants and their clients. Many times, individuals that use tax strategies that may be pushing the tax law boundaries may choose to work with one instead of another type of tax professional since the tax attorney would never be able to testify against them.
- Well-Rounded Advice: A tax relief attorney will typically have the background and knowledge to offer a wider variety of solutions to a particular tax problem than other types of tax professionals. For example, a CPA or other type of tax professional cannot offer advice for filing for bankruptcy. A tax attorney will likely have a bigger arsenal of solutions than other types of tax professionals, which is a good thing when dealing with complex or technical tax problems.
- Representation: A tax attorney is one of the types of tax professionals that can act on your behalf and represent you before the IRS through power of attorney representation. With power of attorney representation, your tax relief attorney can represent you at meetings with the IRS, respond to IRS letters, and handle all other forms of IRS correspondence on your behalf. A tax attorney can also represent you before in tax court for tax issues. Being able to represent you in court is one benefit that other types of tax professionals do not offer.
- Tax Negotiation: Tax laws are complex. There is no standard formula to figure out what will be owed, which tax relief mechanism a taxpayer will qualify for or which penalties the IRS will make the taxpayer liable for. Many factors of the tax code can be negotiated. Tax attorneys generally have superior negotiation skills from their background and training than other types of tax professionals. They can also negotiate on your behalf in tax court, which other tax professions cannot do.
Situations and Problems a Tax Relief Attorney Can Help With
If you are facing legal tax issues, tax crimes, IRS collection actions, or several other concerns, a tax relief attorney can help you. You may want to reach out to a tax attorney If you are dealing with any of the following tax situations or problems.
Tax attorneys can help with many other issues. Don't see your tax concern on this list? Then, contact one directly to talk about your situation. TaxCure offers a curated list of tax attorneys so you can find someone experienced with your tax issue.
- Tax Court: If you are heading to tax court it is always smart to have one on your side. A tax lawyer will be able to represent you in court and will likely know the best approach for handling your situation.
- Tax Evasion: Serious tax offenses, such as tax evasion, can have some very serious consequences. Having a tax attorney on your side when dealing with IRS can greatly reduce your chances of some of the serious penalties that can be associated with tax evasion cases. There are varying levels of tax evasion penalties that can range from prison to small IRS penalties. At times, a tax relief attorney can even remove penalties that have been charged to the taxpayer if they can prove that there was a legitimate reason for not staying in compliance with tax regulations.
- Tax Fraud: If you have committed tax fraud (claimed false deductions, took fake tax credits, significantly understated income intentionally, or anything else that was done with the intent to commit fraud) and need the protection of the tax attorney-client privilege, then it is a good idea to have one on your side. Tax fraud can be serious so having an experienced lawyer on your side is a good idea.
- Willful failure to file taxes: Title 26 USC Section 7203 of the Internal Revenue Code explains that taxpayers can face up to a year in prison, fines, penalties, and restitution for not filing returns, providing information, or paying tax. If you have been charged with willful failure to file taxes, you need a tax attorney.
- Obstruction of Internal Revenue Law Administration: Under Section 7212 of title 26 USC, taxpayers who make threats or impede the administration of internal revenue laws can face up to three years in prison and monetary penalties. Don't face these types of charges without contacting a tax lawyer for help.
- Under criminal investigation by the IRS: Being investigated by the criminal investigation division of the IRS should never be taken lightly. If you are under investigation, you should hire the highest level of tax professional that you can, which is a tax relief attorney. Individuals that are hired by the IRS to investigate individuals are highly trained by the IRS, FBI, and even carry guns. It is rare that individuals get investigated, but when they do it is likely for a serious matter. One thing to know about criminal investigations is that you may not know you are being investigated until you have already been charged with a tax crime. If you know you have done something with your taxes in the past that was not right and you fear you may be investigated, it is a good idea to talk with a tax attorney before any actions are taken.
- Worried about IRS criminal investigation: Often, you may not even know that you are being investigated until you are charged with a tax crime. If you know you have done something with your taxes in the past that was not right and you fear you may be investigated, it is a good idea to talk with a tax attorney before any actions are taken
- Criminal tax defense: Tax fraud allegations and criminal tax charges can have extremely serious consequences. If you have been accused of a tax crime, you should not deal with the situation on your own. A tax attorney can help to defend you or your business.
- Failure to disclose offshore accounts: If you don't report and pay taxes on your foreign assets, you can face criminal persecution and civil penalties. The Offshore Voluntary Disclosure Program (OVCP) allows you to come forward without facing penalties, but you cannot use this program if you're under investigation by the IRS. As over 100 nations have agreed to share financial and tax information with the United States, noncompliant taxpayers are becoming more likely to be identified and persecuted.
Other Problems and Issues a Tax Attorney Can Help With
- FBAR and FATCA Offshore Disclosure Compliance Issues: If you have not filed a Report of Foreign Bank And Financial Accounts (FBAR), you may not be in compliance with the Foreign Account Tax Compliance Act (FATCA). Lack of compliance with FBAR and FATCA requirements can lead to severe penalties. Unfortunately, this happens often, especially when offshore facilitators fail to inform taxpayers of their disclosure duties. A tax attorney can help you deal with offshore account disclosure issues.
- Unfiled Tax Returns: Unfiled tax returns can be a serious issue, especially if there is a large sum of unpaid taxes that go along with them. If the filing of your tax returns does not have legal or complex issues, it may be a better option to use a CPA or an enrolled agent to help (for the purpose of saving money).
- Tax Penalties: Tax penalties can be a significant portion of the total tax amount owed to the IRS. Many times these penalties can be significantly reduced by a qualified tax professional if they can show the IRS that there was a legitimate reason for not staying in compliance with IRS tax laws. Also, if all of these penalties cannot be paid it is likely that a tax attorney can find the next best solution for you in order to get back into compliance with the IRS.
- Tax Liens: A tax lien is the government’s claim on your property. A tax lien will give the IRS rights to everything you own over any other debtor, which means it will significantly impact your ability to borrow money from anyone else. If a tax lien is not resolved it can likely lead to a tax levy, which will allow the IRS to legally seize your assets. A tax attorney can be a good choice to find the best option to get your tax lien resolved before it leads to further IRS actions like a tax levy.
- Tax Levy: The IRS can legally seize wages, bank accounts, real estate, cars, boats, 401K’s, and more. When being faced with a tax levy, it is important to act quickly to limit the financial impact. A tax attorney can likely stop the levy and prevent significant financial damage.
- Unpaid Taxes: There are countless solutions to resolving unpaid taxes. Of these solutions, some are supported by the IRS and others the IRS would never recommend. Having a tax attorney assess your situation from every angle possible can ensure you will get the best financial outcome, whether it is IRS recommended or not.
- Tax Audits: Audits are stressful. You have to give the IRS access to your records, but you need to ensure that your rights aren't being violated. A tax attorney can represent you through the audit process. Whether you're dealing with an individual or business tax audit, they can protect your rights and ensure that you don't face an unfair tax liability.
- Business Tax Controversy: Businesses have complex tax compliance requirements on the federal, state, and local levels. A single tax controversy can threaten your business and potentially close your doors. A tax attorney can help you figure out the best resolution method.
- Individual Tax Controversy: A tax attorney can help with audits, unfiled returns, undisclosed foreign assets, back taxes, or countless other individual tax controversies.
- Accountant Liability: Sometimes, CPAs or accountants need legal help. A tax attorney can represent accountants for liability cases or with other legal issues.
- Probate and Trust Tax Issues: Setting up and administering a trust or dealing with probate issues requires knowledge of tax laws. A tax lawyer can help with fiduciary duties, liability concerns, beneficiary disputes, creditors' claims, and other issues related to taxes, trusts, and probate.
- Estate and Trust Tax Planning: Constantly changing laws mean that you need an expert to help with estate and trust planning. A tax attorney or an estate attorney with tax knowledge is generally the best option in this situation.
- Federal employees and contractor tax issues: If you're a federal employee or a federal contractor who is facing termination due to unpaid taxes, you may need to contact a tax attorney. They can help you negotiate an arrangement for your unpaid taxes, and they can ensure your rights are protected.
Tax Solutions a Tax Attorney Can Help With
The right resolution option depends on your tax issue and your personal situation. A tax attorney can help find the right solution for your needs. Here are some of the resolution methods they use:
These are just some of the resolution options offered by tax attorneys. When you work with a tax attorney, they find the best resolution for your unique situation.
- Offer in Compromise Tax Settlements: An offer in compromise is a complex tax relief settlement that allows you to settle your taxes for less than the total amount owed. The most common situation in which the IRS will accept this sort of filing is if it can be proved that if the IRS were to forcefully collect taxes from the individual that owed taxes, they would collect an amount equal to or greater than the amount being offered in the offer in compromise filing. Proving this sort of thing is a complex task that should be handled by an experienced tax professional.
- IRS Payment Plans: The IRS offers various forms of payment plans. A tax attorney can help analyze your financial situation and determine the best type of payment plan to use, determine the monthly amount to be paid, and handle all related filings to get it properly set up.
- Penalty Abatement: Tax penalties can be partly or fully removed through penalty abatement. The IRS uses tax penalties as a way to frighten taxpayers into staying in compliance with tax regulations. The IRS does not want to punish those taxpayers that do try to stay in full compliance but have a legitimate excuse for not filing, not paying, or not filing accurately. The only way the IRS will remove these penalties is if proof is shown that there was reasonable cause for not staying in compliance with IRS tax regulations.
- Innocent Spouse Relief: An uncommon type of tax relief that many tax attorneys are aware of is called innocent spouse relief. When individuals are married and file a joint tax return, each spouse is then jointly and equally liable for the tax liability that is created. The IRS made innocent spouse relief because it realizes that at times it is unfair to hold both spouses liable for the tax liability that was created.
- IRS Bankruptcy: At times, but not often, bankruptcy can be an option to resolve IRS taxes owed. This is one option that CPAs, enrolled agents, and the taxpayer advocate will not consider, but a tax attorney or bankruptcy attorney will. There are many complexities to dealing with bankruptcy and taxes since it is likely they will not be discharged. If your financial situation and tax situation meet a certain set of requirements, taxes may be discharged.
- IRS Wage Garnishment and Levy Release: If the IRS has garnished your wages or seized the funds in your bank account, you may not have enough money left to survive. A tax attorney may be able to get the garnishment or levy released. If they prove to the IRS that the garnishment or levy is causing financial hardship, they can then negotiate a better option for your situation.
- Release of Federal Tax Lien: A tax lien is the IRS's legal claim to your property, and it can prevent you from selling assets such as homes, property, vehicles, boats, or other personal property. A tax lawyer may be able to remove liens from your assets.
- Currently Not Collectible/Hardship Status: If you do not have the money or assets to pay your tax bill, a tax attorney can help you establish currently not collectible (CNC) status with the IRS. When you qualify for CNC or hardship status, the IRS stops collection actions on your account. In a lot of cases, by the time you have enough money to pay, the statute of limitations may have expired, meaning that you no longer owe anything.
Signs You Need to Hire a Tax Attorney
You should strongly consider hiring a tax attorney or other tax resolution professional if any of the following apply to you or your business.
- You owe the IRS $10,000 or more.
- You have two or more years of unfiled tax returns.
- You owe penalties to the IRS.
- The IRS has placed a federal tax lien on your assets.
- The IRS has levied your bank account.
- The IRS is garnishing your wages.
- You want help dealing with the IRS.
The IRS has the legal right to use a broad range of collection tactics, and the agency has a lot of power. To protect yourself and your assets, you may want to work with a tax professional.
Should I Hire a Tax Attorney from My Local Area?
A lot of people struggling with tax issues wonder if working with a tax attorney near them is the right solution. There are pros and cons to choosing a local tax attorney, and you should weigh your options carefully when deciding.
Going with a local tax attorney gives you the following benefits:
- In-person meetings with your tax attorney.
- Easy to drop off documents or IRS notices.
However, restricting your options to tax attorneys near you comes with the following downsides:
- A limited pool of attorneys.
- Risk of not finding someone who specializes in your tax issue.
- Potential of wasting time driving to their office for in-person meetings or to drop off documents.
- Local tax attorneys may not have established relationships with the IRS.
When you work with a tax attorney who is not in your local area, you can easily submit paperwork over email or through the mail. And you can use virtual meetings or phone calls to take care of your tax issues from the comfort of your home.
Rather than insisting on hiring an IRS tax attorney near you, you should focus on quality. When you widen your search for a tax attorney, you can focus on experience rather than proximity. By using a site like TaxCure to search for a tax attorney, you can find the best fit whether they are down the street or hundreds of miles away.
Who Are the Best Tax Attorneys?
The best tax attorney depends on your situation. You need one who has experience with your particular tax issue and who can negotiate with the IRS on your behalf.
At TaxCure, we have a curated list of tax attorneys and other tax professionals from around the country. You can search for them based on their experience with different tax issues and tax resolution methods. Then, you can consult with a variety of attorneys until you find the right fit. Just click a "Find a Tax Pro" button at the very top of our site and then filter by tax attorneys.
TaxCure can help you to find the best possible professional for your unique situation.
Other Types of Tax Professionals
While Tax Attorneys are excellent professionals to help with tax problems, there are other professionals that can help with various tax problems. Below are the details on other types of tax professionals.
- Certified Public Accountant (CPA) - CPAs are certified tax professionals that can help with a variety of tax issues, tax planning, tax filing, and more. When comparing CPAs vs. EAs, you'll find that they both can handle tax-related concerns, but CPAs also have a broader range of potential focus areas.
- Enrolled Agent - An enrolled is a licensed tax professional who can represent taxpayers in matters relating to the IRS tax laws. Unlike an attorney or CPA, they obtain their authority from the federal government rather than state governments.
- Certified Tax Resolution Specialist - These are specialized licensed tax professionals that are certified by the American Society of Tax Problem Solvers. This certification can be obtained by enrolled agents, CPAs, and tax attorneys who meet educational and experience requirements after passing an exam.
Tax relief attorneys are highly trained tax professionals that can help resolve many tax problems by using a variety of tax solutions. They offer many benefits that other tax professionals do not and also are able to provide a wider variety of solutions than most other tax professionals. If you are being faced with a complex tax issue it is a good idea to consult with a tax attorney to see what types of solutions they would recommend for you.
Tax Attorney Vs. CPA: Differences Between Tax Pros
When a lot of people start searching for help with back taxes, they wonder if they should hire a CPA or a tax lawyer. Ultimately, both of these professionals can handle complex tax issues, but in the rare situation that a case goes to court, only a tax attorney or US Tax Court Practitioner (USTCP) can represent you in front of the IRS. A USTCP is an enrolled agent who has passed a special test.
So, what's the difference between a CPA and a tax attorney? As explained above, these tax professionals can provide very similar services, and their main difference is their training.
Most CPAs have a bachelor's degree in accounting, but many of them also obtain a master's in accounting or a Master's of Business Administration (MBA). Then, they complete one or two years of supervised accounting work experience and take the CPA exam.
Administered by the American Institute of Certified Public Accountants (AICPA), the CPA exam consists of four tests that cover several topics, and between 60 and 80% of the text focuses on federal taxation. CPAs also have to complete continuing education requirements to keep their licenses active.
What Do CPAs Do?
Unlike tax lawyers, CPAs are not authorized to practice law, but they can handle a wide range of tax issues including the following:
- Tax return preparation and filing: A CPA can be an invaluable resource for people and businesses with complex tax situations or taxpayers with high net worth.
- Minimizing tax liabilities: CPAs use their in-depth knowledge of the tax code to ensure their clients pay as little tax as legally possible.
- Tax planning: CPAs also work with their clients to create tax plans that help them meet their short and long-term personal or business goals.
- Back tax resolution: CPAs can help their clients with unfiled returns, back taxes, penalty abatement, and other state and local tax issues.
Whether you decide on a CPA or a tax attorney, you should look for someone experienced with your tax issue and desired resolution method.
Pros and Cons of Hiring a CPA
CPAs offer a lot of benefits to their clients. In particular, you can experience the following benefits when you hire a CPA:
- Help with tax prep: CPAs can prepare and amend tax returns for businesses and individuals.
- Reduced tax liabilities: CPAs can help reduce tax liabilities on your current tax return, and they can help you identify strategies to reduce your tax bill in the future.
- Assistance with back taxes: CPAs can help you explore many resolution options for your back taxes, and like a tax attorney, they can negotiate with the IRS on your behalf.
The only potential drawback of working with a CPA vs a tax attorney is that they cannot represent you in court. If you anticipate going to court, you need a tax attorney.
Pros and Cons of Hiring Tax Attorneys
While deciding between a tax attorney vs a CPA, you should also look at the pros and cons of tax attorneys. The main advantages of working with a tax attorney include the following:
- Experienced in resolving complex tax issues.
- Can save you money on back taxes.
- Ability to help you through an audit.
- Can represent you in front of the IRS.
- Can defend you in court.
However, hiring a tax attorney also comes with a few downsides. Here are the disadvantages of working with one:
- No tax prep assistance -- Tax attorneys typically don't prepare tax returns, but their law firms often employ IRS Enrolled Agents or CPAs who can help with tax prep if needed.
- Higher fees — Because they tend to deal with complex issues, tax attorneys often charge higher fees than CPAs and enrolled agents. However, this may not always be the case and it could be worth it to get quotes from other types of professionals as well depending upon your situation.
- Hourly costs -- Hourly fees can get expensive, but to help you control costs, some tax resolution law firms charge a set price based on what you need.
How Much Do Tax Lawyers Charge?
The cost of hiring an IRS tax attorney can vary significantly. Depending on your situation, fees can range from $500 to $10,000 or more. Below are some of the factors that affect the cost of a tax attorney, you can also read our complete guide on the costs of hiring a tax attorney:
- Case type: The type of tax case and the amount of investigation affect the cost. Relatively straightforward delinquent filing cases, for example, typically cost less than hiring a tax attorney to help with complicated issues such as tax evasion or audit defense. Moreover, some tax attorneys do not work criminal cases, so it is important to find one that specializes in criminal tax cases.
- Type of tax resolution: Tax resolution options require different amounts of paperwork and expertise. For example, setting up an installment agreement is generally easier than applying for an offer in compromise.
- Length of your case: The longer your case takes to resolve, the more you should expect to pay. Of course, this doesn't apply in situations where your tax lawyer agrees to accept a set price based on your tax resolution method.
- Fee structure: The tax attorney's fee structure also affects your final cost. Make sure you understand how your attorney is going to charge you. Some charge a flat fee per case. Others charge hourly. Still, others charge separate fees for investigation (discovery), compliance, and resolution.
- Support staff: If you have multiple lawyers working on your case, you may face a higher bill. However, you may be able to keep costs lower if you have a tax attorney supported by Enrolled Agents, CPAs, or paralegals.
Most tax attorneys start with a free consultation. During the no-cost consultation, you talk about your situation, and the tax attorney gives you an overview of your options and an estimate of how long the process should take.
Free consultations with tax attorneys can take place in person or over the phone. To make the most of this time, you should have details about your tax situation or your latest notice from the IRS.
Are Tax Attorneys Affordable?
Hiring a tax attorney can be an investment, but it depends on your situation. To decide if a tax attorney is worth the cost, you may want to compare the amount you can save in back taxes to the attorney's fees.
Beyond that, you should also consider the intangible value offered by the tax attorney. They can save you time and reduce your stress. Dealing with back taxes, appealing audits, applying for settlements, or seeking tax amnesty on your own can be confusing and time-consuming. Tax attorneys save you time and provide you with peace of mind. They also help you avoid costly, time-consuming mistakes.
Low-Income Taxpayer Clinics provide pro bono representation to low-income taxpayers that qualify for their services. They do have strict guidelines as to who qualifies for these services. Generally, your income must be 250% below the poverty line, and the tax amount in question must be less than $50,000. These services are provided by volunteer attorneys who may be furthering their education. This is a great program offered by the Taxpayer Advocate to assist individuals that cannot afford representation.
Tax Lawyers at the IRS
When you're dealing with tax issues, it's helpful to know who is on the other side. The IRS hires Tax Law Specialists to deal with a variety of tax matters. To qualify for these jobs, applicants must have extensive knowledge of the tax code and pension laws. They also have to know about different businesses and industries.
To become an entry-level Tax Law Specialist, applicants must have a four-year degree and legal or tax accounting experience. This experience allows them to enter as grade 5 Tax Law Specialists, and because the IRS uses a GS-5/7/9/11 career ladder, they may eventually be able to advance to grade 11. Tax attorneys who have a JD or LLM may be able to enter the IRS at a higher grade than five.
If you're dealing with Tax Law Specialists from the IRS, you need a tax professional who is just as knowledgeable and experienced.
Find a Tax Attorney Today
At TaxCure we have made it easy for taxpayers to find top-rated tax resolution attorneys throughout the country. Our network contains many tax professionals, including tax attorneys that can help with resolving various IRS tax and state tax problems. You can start your search below by selecting the agency/agencies you are having issues with and then you can select problems or solutions you are seeking, as well as filtering by only professionals that have a law license. Start your search today to find the best professional to help with your unique situation.