When And Why You Need A Tax Attorney
Most people do not realize that there are times when you need to hire a tax attorney. A tax attorney can help you in a number of situations and you need to know what these situations are. You will be need of a tax attorney in case you experience the following situations.
1. When You Are Audited By The IRS
If you are being audited by the IRS, you need to have legal representation. However, you should not hire the same attorney that handled the sales of your home. A tax attorney is the best option as they will understand what the IRS is talking about and how to best represent you.
The tax attorney will be able to negotiate with the IRS and get a settlement for you. This means that they will are able to help you settle your debt with the IRS for less. This can be done in a number of different ways including the offering of a compromise which works for both parties, an installment agreement or a penalty abatement.
Of course, you will have to be realistic about what you expect from the tax attorney. It is very rare for a compromise offer to be accepted by the IRS and your tax attorney will not be able to force the matter. For a compromise to be accepted, your attorney will generally have to prove a story of hardship which displays that you do not have the money or assets to repay the debt.
2. The IRS Is Filing Criminal Charges
If you are facing criminal charges from the IRS, you will be in need of a tax attorney. This is an extremely serious situation and one that you will not want to face on your own. A tax attorney will help in these situations as they have both the financial and legal knowledge needed to help.
In most cases, the IRS will only bring criminal charges against you unless you have been charged with tax evasion. This is due to the fact that you are legally obligated to pay income tax and evading this will be a criminal act. If you do not pay tax, the IRS will generally send you notices regarding this. If you do not respond or pay the debts, the more it appears you are hiding.
When you start getting notices, you should look at hiring a tax attorney. They will help you respond to the IRS and help you avoid accusations of tax fraud if this is untrue. The last thing that you want is to see these charges through and face the prospect of prison or extremely large fines. Of course, it is important to note that a tax attorney will not be able to help you avoid all trouble, but they will be able to reduce the penalty you face.
3. You Have Received A CP Notice
Any letters from the IRS can be a scary occurrence, but nothing compares to getting a CP notice. This is a letter which is sent by the IRS when you have a balance that is due. However, there are times when this could be a reminder notice telling you that your balance is now due.
If you have received a CP notice and do not fully understand it, you need to contact a tax attorney. The tax attorney you work with will be able to explain what the CP notice regards and what steps you need to take to address this. It is important that you never ignore a CP notice as this could lead to a larger problem that you will have to hire a tax attorney for.
4. Communicating With The IRS
Communicating with the IRS on any matter can be nerve-wracking and you might want to have someone else do this for you. A tax attorney will have the authority and right to contact the IRS for you. In order to provide the attorney with this authority, you will have to sign a power of attorney.
Once this document has been signed, your tax attorney will be able to communicate with the IRS on your behalf. This can go a long way to reducing the stress that you are under when you have to deal with the IRS. It can also eradicate some of the misunderstandings that you might have with the IRS which will lead to much larger issues such as penalties and criminal charges.
5. When You Have Questions About Your Tax Return
There are many people who assume that a tax attorney will be able to help them when they have a question about their tax return because they often communicate with the IRS. The truth is that a tax attorney will not be the best person to contact for this. When you have issues with your tax return, you should be hiring a CPA as they are better prepared to deal with this. Read next to know what CPA and Tax Attorneys actually do?