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When Do I Need A Tax Attorney?

February 27, 2022 By wrlaw

For many people with straightforward finances, taking care of their taxes and any tax hurdles they may encounter is often as simple as scheduling an appointment with their accountant or CPA. 

However, in certain circumstances, tax issues can become so complex that even your accountant may not be able to handle problems that arise. In this case, it is often necessary to consult with a tax attorney. Yet, you may find yourself wondering what a tax attorney is, how they differ from an accountant, and how you will know if you need a tax attorney.

What Does A Tax Attorney Do? 

While you likely work with an accountant at least annually to help you stay on top of your income/business taxes, you are not alone if you are unfamiliar with what a tax attorney does. While accountants typically review and examine financial records and provide tax advice, tax attorneys can handle more complex tax issues. 

A tax attorney is a lawyer who specializes in tax law and can help people arrange their finances to optimize their tax situation. They can also assist people who encounter legal problems with their taxes. 

However, it is essential to note that a tax attorney will not help you file your taxes. So, when would you need to hire a tax attorney? Keep reading for a look at a few situations where you could benefit from consulting a tax attorney in North Carolina.        

Situations When You May Need A North Carolina Tax Attorney

You Are Being Audited By The IRS

If you are being audited by the IRS, this does not necessarily mean that you’ve done something wrong. It simply means that the IRS is doing a formal examination of your tax records. Most tax audits are simple and can be handled by a certified public account. 

However, if you disagree with the audit results and wish to dispute them, or the IRS takes you to court during the audit, you must consult a tax attorney. You must work with a tax attorney in this situation, as an experienced lawyer can be instrumental in helping you navigate the complex world of IRS audits. 

Let’s face it unless you have a background in finance and tax law, trying to understand a tax audit, let alone appeal the IRS’s findings, can feel impossible. Fortunately, a tax attorney can communicate with the IRS on your behalf, removing much of the stress of appealing an IRS case from your shoulders. 

They can research your case to help you find a solution, they can represent you should your case go to court, and they can also help you negotiate a settlement with the IRS. Do not try to handle a complicated IRS audit on your own. If you are planning to appeal your case or your case is being taken to court, it is essential that you work with a tax attorney.

You Owe Back Taxes

If, after filing your taxes or completing an audit, you find that you owe a significant amount of money in back taxes to the federal, state, or local government, you may want to consider consulting a tax attorney. Tax attorneys know tax law in ways that accounts don’t, and they may be able to help you work with the IRS, or other government agencies, to help you find a solution to your current tax problem. 

A tax attorney may be able to negotiate on your behalf to work out a formal agreement to help you settle your tax debt. Tax attorneys know tax law inside and out, and they may even be able to help you settle your debt for less through an offer in compromise or a penalty abatement. They can also help you work out a deal to make installment payments on any remaining tax debt if you owe more than you can afford to pay upfront. 

You Are Starting a Business

Of course, consulting a tax attorney can also prove instrumental in helping you to avoid problems with the IRS, particularly if you are planning on starting a business. When you are in the process of starting a business, you will have to decide what type of business to establish, such as an LLC, an S-Corp, or a C-Corp. 

Working with a tax attorney when setting up your business is critical. You will want to make sure that you understand the type of business you are establishing and the tax responsibilities that come with it to avoid problems with the IRS. 

It is then imperative that your work with a tax attorney when starting a business, as an attorney can help you to structure your business in a way that reduces your tax burden and potential liabilities, preventing you from encountering problems with the IRS in the first place.  

You Are Considering Buying/Selling a Business

You should also consult a tax attorney if you are considering buying or selling a business in the near future, as a tax attorney can help you structure the sale in a way that minimizes your tax burden. 

For instance, someone selling a business will want to structure the sale in a way that minimizes capital gain, while someone buying a business might want an allocation that helps them recover the purchase price faster through depreciation. 

The fact is that buying or selling a business can result in a complicated tax situation, and working with a tax attorney can help minimize the amount of taxes you pay while also helping to ensure that the sale is being handled properly, reducing the likelihood of an audit down the road.

You Are Looking to Create an Estate Plan

Considering that you have worked hard to establish yourself and earn all of the assets in your estate, it is understandable that you would want to do everything to ensure that your assets pass to your heirs after your death with as little as possible being lost to estate taxes. 

Fortunately, only large estates valued at more than $12 million pay estate taxes. However, if you believe that your estate will be subject to taxation after your death, a tax attorney can help you devise estate planning strategies to minimize the tax burden placed on your estate. This can help ensure that as much of your estate as possible passes to your heirs. 

Contact Our North Carolina Tax Controversy Attorneys

There are many situations in which working with a tax attorney is necessary. These legal professionals have specialized knowledge and experience that can prove instrumental in helping you avoid encountering problems with the IRS. If you’re facing a situation with the IRS where you may need a tax attorney, contact Wilson Ratledge today at 919-787-7711 to schedule a consultation.

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