What Is a CPA Tax Attorney?
What is a CPA tax attorney? A CPA tax attorney is both an accountant (the CPA) and also an attorney (the tax attorney). In a certain sense, the CPA tax attorney is a perfect combination of the two most important professions for virtually any tax issue. The CPA typically handles the accounting issues for the taxpayer. The tax attorney will then analyze the holdings of the accountant, while also advising the client as to what exactly they need to disclose, if anything, on their tax returns, as well as how best to report their income and deductions to minimize audit triggers.
The CPA tax attorney begins with his or her accounting knowledge to best prepare the tax returns. The importance of proper tax preparation cannot be understated – many unprepared returns have so many issues that the taxpayer finds himself in a tax audit about 90% of the time . In handling the tax audit, the CPA tax attorney will be able to negotiate any reduction or closing agreement with the IRS that may be available, due to his or her ability to argue the accounting aspects as well as the legal aspects behind the deductions at issue.
This also ties in closely with tax litigation. The CPA tax attorney will be ready willing and able to present the client’s case to the US Tax Court, IRS Appeals division, and other tax administrative courts, as well as the federal and state courts for tax litigation.
The CPA tax attorney will also work with the IRS on installments agreement, offers in compromise, abatement of penalties, collection due process hearings, innocent spouse claims, and much more.
Advantages of Working with a CPA Tax Attorney
The right tax professional can save you time and money while reducing uncertainty. Tax is more than just a technical issue: the IRS routinely pursues criminal prosecutions against those who file incorrect tax returns or underpay their taxes. But, properly ponied speech can protect you against those formal charges. Furthermore, a tax attorney is always a wise counsel when it comes to complex tax planning, compliance, and litigation.
A tax attorney is able to minimize clients’ tax liability by locating new and creative methods of avoiding taxation. An example of this is a parent who wants to pass down the family business to their children without losing it to taxes. This individual may choose to let their children take partial ownership of the business while maintaining control over management and daily operations. This family has made a gift that is not taxable to their children while ensuring that they will be able to run the family business.
A common area of IRS compromise is tax penalties. In the 2014 fiscal year, the Internal Revenue Service (IRS) issued over 4.5 million tax refunds totaling more than $12.5 million in compliance penalties. For most taxpayers, that penalty will not be significant enough to push them into a higher tax bracket. But for some, it will be enough to put them in a lower bracket or even raise their tax refund.
IRS penalties typically fall into four categories: A knowledgeable tax attorney can develop a strategy to negotiate those penalties down for you as low as possible. The IRS will be more likely to grant you a penalty abatement if you have worked with legal representation.
Ways to Locate a Competent CPA Tax Attorney Near Me
When seeking assistance from a qualified CPA tax attorney, the following are among the steps that can be taken to make an informed choice: Reach Out to Your Tax Professional If you already work with a CPA, accounting firm or bookkeeping service, they might have a recommendation for a tax attorney with whom they have worked in the past. Start by asking them if they have ever collaborated with a local tax attorney who focuses on the type of services you need. If you need some specific services, let them know exactly what you’re looking for and ask if they can recommend a CPA tax lawyer. It might even be an added benefit to have legal and accounting services under the same roof. Contact the California Bar Association The California Bar Association’s website contains a comprehensive directory of attorneys of all kinds throughout California. You can use this resource, along with other local resources, to narrow down your search. Read Online Reviews All professionals should have an online presence in some form or another, offering you the chance to learn more about them before you pick up the phone. While there are no guarantees, reading through reviews can help you determine if a CPA tax lawyer is right for you. Look for testimonials from people in similar situations, for instance. Schedule Free Consultations Some lawyers may offer a free or discounted initial consultation. In this session, you can ask questions to determine if the tax attorney is equipped to properly handle your case. Ask about their experience in dealing with your particular issue and verify their qualifications as a CPA, since not all tax attorneys have that education and background. The more questions you ask, the better your understanding will be of the specific professional you’re considering.
Critical Questions for a CPA Tax Attorney
After you determine whether the CPA, as opposed to the Attorney or Accounting Firm, is the right fit for your needs, there are a few more questions you should likely ask.
1. Is there going to be someone else from the firm working on my case and, if so, will I have direct access to that person?
Even if the CPA is the firm partner overseeing your case, you may have staff members who will be doing heavy lifting under his/her guidance. Be sure you understand if you will be working with someone else and, if so, make sure you have direct access to them.
2. What is your specific area of expertise and how long have you been practicing this area of law?
If you hire an attorney, you will be hiring them to represent you in a specialized area of law. Be sure you determine that they actually practice this area of law regularly before retaining them.
3. If I start working with you , how long will it be until my matter is resolved?
This question, of course, is impossible for anyone to answer. However, there is value in asking this question so that you and your CPA Tax Attorney can manage expectations on both sides. Your CPA Tax Attorney will likely be able to provide ballpark estimates based on similar cases worked in their past.
4. Have you worked on cases that were similar to mine previously?
Again, like the question regarding area of expertise, it is important that you know that your CPA Tax Attorney does work on matters similar to your own on a regular basis. Additionally, it is important that you understand the CPA Tax Attorney’s level of experience. For some, a general understanding of tax law is sufficient, but for more complex tax law matters, you will want a CPA Tax Attorney with deeper knowledge and experience.
What Does It Cost to Retain a CPA Tax Attorney?
If you are seriously considering hiring a CPA tax attorney, it is important to first get a sense of how much you can dedicate towards legal assistance. The average attorney in the United States charges between $100 and $350 per hour of service. Based on average billing time with IRS-related cases, there are a few different cost tiers for tax attorneys across the United States.
When facing criminal tax evasion charges, most people will be facing penalties that amount to over $250,000 and in some cases, even over $1 million. As such, many individuals facing criminal tax charges will have legal expenses in the range of thousands of dollars. Largely, this will be due to the length of time it takes to settle these cases.
In civil cases that are more straightforward than criminal cases, average fees from a CPA tax attorney come out to about $1,500 to $2,000 on average. The simplest cases could be resolved without spending more than $500, but most cases will require more lawyer time than that.
The biggest factor impacting your tax attorney fees will be the complexity of the case. Lawyers’ salaries vary significantly between states, as well. For example, on the high end, an attorney in the District of Columbia might charge $600 to $750 for an hour of their services, but in North Dakota the prices remain fairly low at $150 to $200 per hour. The average tax attorney here in Orlando is charging between $100 and $350 per hour.
Client Testimonials & Success Stories
Client reviews and testimonials are a vital part of assessing a CPA tax attorney. A CPA tax lawyer is much more than a tax preparer, just as a CPA is much more than someone who fills out forms at tax time. For example, Mark Driver CPA, who has a long history handling high net worth estates with complicated tax issues, mentions how he works with a CPA tax attorney to resolve problems, saying "We work with this particular firm on a lot of the tax matters, and they’re excellent."
Success stories are another important consideration in selecting the right tax professional for your needs. In one real life situation, a North Carolina couple had overpaid over $80,000 in income taxes and showed the IRS documentation that they were entitled to a refund. The IRS refused to admit their error regarding the the overpayment, however, and instead claimed that the couple in fact owed them almost $90,000 in taxes for what the IRS said was unreported income, all of which went back years. This couple had the help of an experienced tax attorney and CPA team and their case was resolved with a negotiated settlement , despite the IRS denial that the overpayment existed and the time limits on claiming it.
There is a variation of the above situation in a partnership case where the IRS claimed they were owed money from a partnership that had made no money, ever. In this case, the couple were losing their assets and their dreams due to a multi million dollar IRS tax liability for an income tax year that never existed. As was the case in the previous example that we just looked at, they had an experienced tax attorney and CPA team that got their case resolved with a negotiated settlement. In this case the asset protection structure that Travis W. Watkins and Associates used was so effective that actual possession of the assets by another was not needed to place them beyond the reach of IRS collection.
If you have an IRS problem and you need a College educated seasoned tax attorney and CPA team with successful results and client testimonials, contact me today at Travis Watkins, PC.