When Should You Hire a Tax Lawyer?
If you're a wage earner, you'll probably be able to file your taxes and not require any professional help.
Taxation laws can get complicated. So, as your circumstances change, you might need to hire a certified public accountant (CPA). They're expensive but can save you lots of headaches and problems with the Internal Revenue Service (IRS).
It's not everyone who'll need the services of a tax lawyer, but they're your best bet when it comes down to issues with the government.
Take, for instance, this news from https://www.canadiantaxamnesty.ca/article/cra-directing-attention. The Canadian Revenue Service announced the sentencing of an employment agency owner for tax fraud.
You won't get yourself in such a dire situation if you consider professional advice earlier on. Here are some reasons you'll have to seek help from an attorney.
These lawyers specialize in taxation laws and are best for handling technical and legal issues. Not all of them have accounting backgrounds, so depending on your problem's complexity, you might need a solicitor who's also a CPA. Keep in mind that their fees are very high.
You're Starting a Business
Before you set up your business, you must understand the tax implications of the different types you can choose. Not all entities are equal. A corporation offers more protection than a sole-proprietorship.
It's best to seek legal counsel to advise you on the formation and structure of your company. These professionals can also offer recommendations on non-tax matters you haven't considered.
If you engage in international business with complicated contracts and taxation laws, a tax attorney's assistance can be invaluable.
You Have Legal Issues
If the IRS is bringing up criminal charges against you, especially tax fraud, you'll need a knowledgeable lawyer. Even if you're found guilty, as in the Canadian case mentioned above, an experienced attorney may get you a lighter sentence.
You'll also require legal representation when you sue the Revenue Service or need to appear in the US Tax Court.
An important reason to hire a solicitor is attorney-client privilege. The law doesn't decree your counsel to reveal to the judge anything you disclose to them. Accountants, on the other hand, may not have the right to do the same.
You Have a Taxable Estate
When it comes to estate taxes, the IRS has a high exclusion threshold, meaning that most people won't have to pay any.
However, if you leave behind assets that exceed that limit at the time of your death, your heirs will be liable for up to 40% tax on the excess.
An expert in estate planning can help you implement strategies to keep your wealth below that exemption level. You'll reduce your potential liability legally.
Planning is Vital
It's always advantageous to plan to avoid future problems. Use the above guides to decide if and when you should hire a tax lawyer. They're expensive, but they can help you save money and stress when you have an issue with the IRS.