Do you need an accountant or a tax attorney?

What’s the difference?

When it comes to taxes, you can never be too careful or too organized. And if you spend your time running a small business, you’re likely going to need help along the way to ensure you’re being careful and organized enough. A tax professional can help.

Commonly, businesses rely on accountants and tax attorneys. How do you know which type of professional is the best fit for your needs? Let’s take a look at the differences between the two tax pros.

All about accountants

You’re probably most familiar with accountants during tax season. But the truth is a qualified accountant can help with much more than just filing your tax return. If you run a small business, it’s a good idea to form a relationship with an experienced accountant so you have someone to call on with tax or accounting questions. This is also true if for personal taxes if you have expenses, income and deductions beyond a simple return.

Accountants provide a wide range of general and advanced tax services, including:

  • Financial planning
  • General bookkeeping
  • Prepare and file tax forms
  • Tax planning
  • Audit assistance
  • Business budgeting, cost and asset management
  • Can be a key team member for making business growth decisions

Accountants can pursue varying level of education, from tax preparer certification to the coveted Certified Public Accountant (CPA designation). If you’re looking for help preparing taxes and filing the correct forms, a general accountant may suit your needs. However, if you need help with financial planning, asset management or audit assistance, a CPA may suit better. There might be a cost difference between the type of accountant you choose; however, don’t let cost dissuade you from getting the help that you need to adhere to tax laws.

Keep in mind that accountants are not well-trained in the legal aspects of tax law. If you’ve become involved in legal proceedings with the IRS, your accountant may be able to help prepare necessary information, but a tax accountant will help you manage the court system.

Get to know a tax attorney

Tax attorneys are lawyers with a Juris Doctor (JD) degree and admission to the state bar, who also have subsequent education in tax law. Some are also CPAs, which enables them to handle the duties of an accountant, as well as those of a legal tax advisor.

Tax attorneys understand the finer details of tax law — an extremely valuable skill if you’re ever involved in an IRS action. Commonly, tax attorneys can assist with:

  • Estate planning or filing estate related tax returns
  • Business start-ups that have a complicated entity or tax requirements
  • Payroll/employee taxation issues for business with multiple employees
  • International business and tax laws
  • Filing a lawsuit against the IRS
  • IRS lawsuits against you
  • Criminal IRS investigations against you
  • Representation for tax fraud accusations against you

A tax attorney can help resolve many tax-related problems. They negotiate on your behalf and are trained to analyze complicated tax information and formulate a plan for resolving your case. Because tax laws change every year, tax attorneys are also invested in constant learning to stay abreast with all the changes.

Need some tips for choosing the best tax professional to meet your small business’s needs? Stay tuned for need-to-know info before you hire an accountant or tax attorney.


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