Are tax attorneys worth it?

Are tax attorneys worth it?
Are tax attorneys worth it?

Tax attorneys and accountants, both can help you in the hour of need but hiring a tax attorney has a more ominous meaning. It means that you are no longer wrangling with figures- you are hiring a person to fight the law.

Tax lawyers can handle matters that accountants cannot. All they do is wrangle with numbers. However, both have the ability to handle past problematic estate issues. They both work to help you plan your best course for the future.

Who are tax attorneys?

A tax attorney is a lawyer who specializes in the technical and complex field of tax law. They are hired to handle your legal and technical issues related to your tax situation. Generally, a tax attorney steps in after a problematic situation but it is better to seek advice in advance for best tax planning.

When do you need a tax attorney?

The expertise of tax attorneys is focused on the technical and legal complications of the tax situation. For instance, if you are facing a legal tax matter as well as an accounting problem, it is best to look for an attorney who is an enrolled agent or a certified public accountant. They tend to be expensive but they handle the matters best.

Here is why you need a tax lawyer:

You have a taxable estate

The IRS, Internal Revenue Service has its eyes on taxes but the story does not end on personal tax returns. They have eyes on capital gains tax as well. You are liable to file tax returns if you own an estate.

As of year, 2020, your estate is a taxable asset if the total value of the property at the time of your death equals or exceeds $23.16 million. Most people do not worry about tax planning as the property value usually does not exceed but your heirs are liable to pay 40% of the estate value if it exceeds the threshold value.

A tax attorney can help you devise estate tax planning strategies to help you stay below the threshold value and prevent a significant amount of estate value from going into the IRS’s hands.

You are starting a business

Are you looking forward to establishing a corporate? If not, what business are you planning to set up? Any business you are setting up will have tax ramifications for sure. A tax attorney can advise you about your company’s tax treatment and structure including non-tax issues that you might not have thought of, otherwise.

If you are launching a business with international relations, you would need help in legal matters, tax treatment, and other contracts. The presence of a tax attorney in this situation can be viable.

You have legal tax issues

If you are under investigation by Internal Revenue Service, considering fighting against IRS or want to seek advice on a legal tax case before going to US court, you will require an experienced tax lawyer. Although non-attorneys can represent a client, it is always good to go with someone who is well-versed with the tax laws.

What questions should you ask your tax lawyer?

Here are a few questions that you should ask the tax lawyer during the initial meeting:

  • How much does the tax attorney charge?
  • For how many years has he been representing clients with legal tax issues?
  • Is he admitted to the state bar?
  • What area of tax law does he specialize in?
  • If the tax lawyer cannot help you, can he refer you to another experienced tax attorney?

Tax is a complex business and it is always better to seek the help of a knowledgeable yet experienced tax attorney to help you resolve legal tax issues.