You should hire a tax lawyer when facing an Offer in Compromise, struggling with IRS communications, dealing with missing tax returns, responding to CP notices, or starting a business. Unlike tax preparers who handle routine filings, tax lawyers provide legal representation and negotiate complex disputes with the IRS.
5 critical situations requiring a tax attorney:
- Offer in Compromise applications – Settling tax debt for less than owed
- IRS communication difficulties – Professional representation for calls and correspondence
- Missing tax returns – Explaining unfiled returns and avoiding penalties
- CP notice responses – Understanding and disputing IRS error notices
- Business formation – Choosing tax-optimal business structures
Key difference: Tax lawyers offer legal protection and advocacy, while tax preparers focus on basic return preparation. If you’re facing IRS disputes, significant tax debt, or complex financial situations, professional legal representation can protect your financial future.
- You Have An Offer In Compromise
Offer in compromise is a program instituted by the Internal Revenue Service (IRS) for taxpayers who cannot pay the taxes they owe, or for taxpayers for whom it would create a financial hardship to pay the taxes they owe. An offer in compromise allows taxpayers to settle their tax bill for less than the full amount owed.
When considering whether to allow a taxpayer to settle his bill with an offer in compromise, the IRS will look at the taxpayer’s unique circumstances, including their income, ability to pay, expenses, and any assets the taxpayers owes.
Wondering if you’re eligible? Taxpayers can find out if they are eligible for this program by consulting the Offer in Compromise Pre-Qualifier questionnaire online.
- You Need to Communicate With the IRS
Communications with the IRS can be a challenge. If you get flustered or frustrated under pressure, or you’re not generally well-spoken, you might want an attorney to help you communicate with the organization effectively.
Otherwise, relations with the IRS can quickly go downhill if you can’t communicate what you need to. If speaking assertively and clearly seems like a challenge, have a professional tax attorney do it for you. They can make phone calls, send out letters, write emails, and generally speak for you.
They can also help explain confusing IRS communications to you in layperson’s terms. This will help the IRS and you understand each other better, so there aren’t further issues arising from confusion.
- You’re Missing Tax Returns
No matter how organized and responsible you are, you might forget to file a tax return every once in a while. If you need to account for and file a missing return, you should get a lawyer to help you with the process.
The IRS might also ask pointed questions about why those returns were never filed in past years. Your attorney can represent you and explain just what happened in those years to cause the delay in filing the returns.
- You’ve Got a CP Notice
If the IRS sends you a CP notice, it typically means you owe the government some amount of money or there was an error on the return. However, it can be hard to read and understand these notices, so you might not even be sure just how much money you owe or why the changes are being made.
If you’re not sure about how much you owe, or you don’t agree with the amount you’re being asked to pay, you should get an attorney. A tax lawyer will explain exactly what the notice says and can assist you with questioning the amount due if needed.
- You’re Starting a Business
When you’re starting a business, a lot of tax-related and money-related questions might come up. What kind of business entity is right for your needs? Do you plan to incorporate? Should you work as a sole proprietor?
No matter what setup you choose, it will mean something for your taxes. A tax lawyer can help you choose the best business structure for your needs, and can also help you navigate non-tax-related financial issues that you might not have thought of. They will even help you if you plan to work in international business and need help with tax treatment, contracts, and more.
Ready to Hire a Tax Lawyer?
From entrepreneurs to everyday taxpayers, everyone needs a tax lawyer from time to time. If you think a tax attorney might be able to help you, don’t wait – hire one today. You’ll feel less stressed and have a better outcome at the end of the day.
Wondering if we’re the right tax attorneys for the job? Find out more about how we can help you here.
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