What is the Difference Between Tax Lawyer & CPA?

Joe Valinho
Expert Contributor
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Last Updated on

How is a Tax Lawyer Different From a CPA?

“Should I hire a tax lawyer or a CPA?” is a question asked by many. But unfortunately, there is no one-word answer to this. It depends upon what kind of help you want. If you need to get your tax returns reviewed, conduct tax planning, or get accounting work done, then you probably need a CPA. On the other hand, if you need to resolve any complicated tax matter, need legal representation in court, resolve tax debt, or handle civil and criminal tax cases, then using a tax lawyer’s services is the better choice.

What Does a CPA Do?

Individuals and companies hire Certified Public Accountants (CPAs) to plan their financial and tax strategies to limit their tax liability. CPAs also prepare and file tax returns and conduct reviews of tax returns and other tax documents in case of an IRS audit. They also do accounting tasks.

A CPA may have specialization in a specific field of accounting. A CPA with a tax accounting specialization is your best choice if you wish to use their services for that particular tax problem.

What Does a Tax Lawyer/Tax Attorney Do?

Tax attorneys are experts in tax laws and the tax code. They can better handle a complicated tax issue because of their in-depth knowledge about tax laws and IRS rules, as well as litigation experience. Being a lawyer, a tax attorney can represent you before the IRS and also in court.

What is the Difference Between Tax Lawyer & CPA?

In back tax resolution cases, a tax attorney can act on your behalf and conduct all communications with the IRS, whether through mail or in-person. Since tax attorneys have specialization in taxation, they are fully capable of handling even the most difficult tax debt cases.

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Tax attorneys may specialize in certain fields of taxation, such as corporate tax or tax debt resolution. If you are looking to resolve a tax debt issue, you may choose a tax attorney specializing in tax debt resolution.

When Should I Hire a CPA?

Before you hire a CPA for a tax problem, make sure that they have a taxation specialization and have at least some experience holding talks with the IRS. A CPA who only prepares returns or does accounting may not be competent to handle complex tax issues.

In case of an IRS audit, a competent CPA can help you review and prepare your tax returns and other tax documents for the audit. Since a CPA can represent you before the IRS, he or she can hold talks with the IRS on your behalf in an in-person audit. However, you should choose only a CPA who has sufficient knowledge and experience in this area to represent you before the IRS. Choosing the right person is paramount because even a small mistake before the IRS can cause unnecessary delays, complications, and financial loss.

Since a CPA’s area of expertise is usually restricted to tax return preparation and accounting, you can hire their services for tax problems related to tax returns, other tax documents, and accounting.

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When Should I Hire a Tax Attorney?

Tax attorneys are specialists in tax-related matters. They have the educational background, training, and experience in taxation, allowing them to resolve complex tax matters for individuals and corporations.

Since a tax attorney is a lawyer, they provide legal advice and prepare legal documents for a tax case. In complex tax matters, such as if the IRS has seized your bank account or property for recovering back taxes, a tax lawyer can help stop the lien and achieve a favorable resolution of the tax debt.

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You can also seek tax advice from a tax attorney. For instance, you received an IRS notice such as CP503, which informs you that you owe taxes. You want to resolve the matter but cannot afford to pay the entire amount you owe. In such a case, you can seek advice from a tax attorney about how you should proceed. Your tax attorney can provide you with assistance in getting tax debt reduction after reviewing the particulars of your case.

Also, an attorney can help you with an IRS audit. You can grant your tax lawyer a Power of Attorney, after which your tax attorney will respond to all IRS communications for you and speak to them in-person if requested by the IRS. Before you grant this power to your tax attorney, it’s best to conduct a thorough background check on the company or the lawyer you are hiring to ensure that they are legitimate and honest.

Which is Better for Me: a Tax Lawyer or a CPA?

If your tax case is simple and limited to sharing your tax documents with the IRS, and reviewing your returns and accounting issues, then hiring a CPA will suffice.

On the other hand, there are some situations where a tax lawyer becomes necessary. Is the IRS conducting an in-depth tax audit? Do you owe a substantial amount in back taxes? Are you unable to pay back your IRS debt? Do you wish to challenge the IRS in a tax court? Do you need a resolution for any complex tax problem? If you answered yes to any of those questions, you need a tax lawyer to represent you.

Along with CPAs and tax attorneys, enrolled agents can also represent taxpayers before the IRS. The status of an enrolled agent is the highest credential the IRS awards. To become an enrolled agent, the person needs to pass a comprehensive IRS test or be a former IRS employee. Also, in order to remain an enrolled agent, he or she needs to complete 72 hours of continuing education every three years.

Depending upon your tax problem, you can use the services of a tax attorney, enrolled agent, or a CPA to resolve it. Each has their area of specialization. Depending upon the problem for which you need a solution, you can choose the appropriate professional to resolve it.

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If you are having trouble deciding, you can use our free consultation and discuss your tax problem with us. We will help you to choose the right professional so that you get the right start towards resolution.

Joe Valinho
Expert Contributor
Last Updated: