Tax Attorney vs Accountant

As a business owner, you want to make sure that you’re doing what’s necessary under the law. You want to pay your taxes, file in a timely fashion, make sure you’re doing withholding taxes correctly, and more. For many businesses, a qualified accountant can take care of all of that with no problems. Yet, there are times when it might be beneficial to work with a tax attorney instead. A tax attorney has special training and qualifications that set her apart from your average accountant.

Here are some factors to consider when you’re deciding between a tax attorney vs accountant:

•If you need confidentiality from the legal perspective, a tax attorney may be the better choice.

There is any number of situations you could find yourself in where, through little more than ignorance on your part, your business is in violation of tax laws. In order to be able to talk freely with your tax professional and have full confidentiality that’s protected by law, that professional needs to be an attorney.

When you give information to an attorney, that information is protected by law. Attorney-client privilege is a basic legal principle that states that information you give to a tax attorney vs accountant, can’t be given to third parties such as the IRS.

To be sure, you do have some confidentiality with an accountant. In a situation where there is no criminal offense involved, your accountant maintains confidentiality. That said, only an attorney is exempt from being forced to give testimony against you or to provide information to third parties.

•You may need to consider a tax attorney vs accountant if you’re looking at a complex legal issue.

Let’s suppose, for example, your business is facing tax bankruptcy. An accountant can’t help you with that, and they can’t provide you with advice in that area. A tax attorney can.

Here again, there are many areas in which an accountant can help, however. If you need to correct a tax return, you don’t need a tax attorney. You just need an accountant. As a general rule of thumb, any situation that can wind up with a court proceeding is probably best left in the hand of a tax attorney rather than in the hands of an accountant.

Situations that would fall into this category would include things like possible litigation, liability concerns, or if a tax claim is filed against your business.

•You may wish to have a tax attorney vs accountant if you’re going to be involved in negotiations.

Attorneys are trained to look at the given facts of a case in light of the relevant law, and then make an argument that benefits you as much as possible. They can help with the entire negotiation process, especially if you’re facing an audit or severe penalties. In an extreme situation, a tax attorney can negotiate on your behalf in court, allowing you another way to resolve your tax concerns.

•You can do your taxes with an accountant and consult a tax attorney on an as-needed basis, too.

The vast majority of small businesses aren’t going to face the kinds of complex legal issues that warrant hiring an attorney. You’re not going to likely be in a situation where you need client-attorney privilege, or where you’re going to face a difficult audit. Most tax problems are solved without going to court, too.

All of that said, most tax attorneys can be hired after an incident takes place. If you have an audit that puts you in a bad spot, for example, you can seek help from an attorney at that point. The tax attorney may work with your accountant to gather all of the relevant information and help you make the best of the situation.

There are even tax attorneys that are also qualified as CPAs, who can practice in both fields. When working with one of these professionals, the question of tax attorney vs accountant becomes moot. Their rates will be higher than a standard accountant, of course, but if your business is likely to face complex tax concerns it can be well worth it.

Ultimately, you need to choose the professional that best suits your business. Look at your business’ needs, and identify where it would be best to have a tax attorney vs accountant.

Still have questions? Reach out to one of our tax professionals.

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