Tax Lawyer vs. Tax Accountant: Which Do You Need?

For many Americans, filing their personal taxes is confusing enough. Add in the possibility of an IRS audit and it becomes a nightmare. So who should you hire when that nightmare arrives: A tax lawyer or a tax accountant?

What is the difference between a tax lawyer and a tax accountant?

A tax lawyer is really exactly what the name implies: a lawyer who specializes in tax law. This individual has a deep understanding of tax related litigation.  

A tax accountant is more commonly thought of as a certified public accountant (CPA). This is the numbers and math person who can help you file your tax returns or amend them as needed. They normally specialize in tax returns and can answer most of your tax related questions.

Which professional do you need?

The person you will need for your situation depends entirely on the problem.

Some problems actually might require a lawyer and an accountant, while other issues are better handled by only one. For each problem, it is best to first step back and analyze the issue. Below are some examples of common problems and who is best suited to help:

IRS pursues criminal charges

If the IRS is actively pursuing criminal charges against you for such things as tax fraud or failure to pay, it is definitely time to contact a Tax Attorney. An attorney could be invaluable and save you jail time and/or additional fines.

Audited by the IRS 

If you are being audited by the IRS, you might find it comforting to hire both a tax lawyer and a tax accountant. The lawyer can help you sort through any possible legal issues that may arise and a tax accountant can take a second look at your return to see if there are glaring issues that you need to be prepared to speak about.

Complex Tax Estate 

It is wise to contact a tax attorney is you have a large taxable estate or if you need to do some long-term estate planning. A tax attorney can help you set it up in such a way that your heirs receive the most benefit and not the government.

Starting a New Business 

There are various types of businesses to choose from when starting a small business, including sole proprietorship and LLCs. By seeking out a tax attorney, you can weigh the pros and cons to each business structure from a tax perspective.

Nervous About Tax Forms 

Anytime you are nervous or have questions or concerns about tax forms, it is imperative you speak with a tax accountant. This person can help with any concerns you may have and help make sure you avoid sending any red flags to the IRS, which could result in an audit.

Remember that these general situations don’t cover all the tax-related problems that could arise. This advice is not de facto legal advice and it is recommended that if you have a tax problem to speak with a tax attorney.

Author Jason Lancaster writes many tax related articles for well-known Denver Tax Attorney Jana Olson.