Tax Attorney Versus CPA: Who's Right to Handle Your Taxes This Year?

by Penny Jones

A tax attorney and a certified public accountant are both trained to help you during tax season. However, they differ in key ways that might affect who you choose to hire.

If you're seeking help with your tax return preparation this year, or if you need tax resolution services, you might be wondering who to hire. Certified public accountants, tax attorneys, and paid tax preparers will all be vying for your business. To make an educated decision, take into account the specific training of CPAs versus tax attorneys, as well as what kind of assistance you actually need.

Tax Return Preparation

Most accounting firms include tax preparation services in their larger bill of offerings. When you visit a CPA, he can go through your financial files and complete the tax return with you and then sign off on it as a paid preparer. If there are any issues with the return, the CPA will act as your advocate with the IRS. Some tax attorneys also prepare tax returns--but not all will, as they tend to devote their time to more complex legal matters. Additionally, if you hire a tax attorney to prepare your return, it may end up being much more expensive than hiring a CPA or even a paid tax preparer.

Legal Advice and Representation

Tax attorneys are lawyers who specialize in tax law. That means they have completed law school and are able to represent you in court, should you need it. They also have detailed knowledge of the complex tax codes and can guide you through negotiations with the IRS. An accountant, on the other hand, usually has a degree in finance or accounting and has been licensed as a CPA by the state, after passing the certification exam. While an accountant may have a thorough knowledge of tax laws, he cannot represent you in legal matters. Additionally, only with a tax attorney will you have the benefit of attorney-client privilege, meaning that anything you discuss with your lawyer will be confidential.

Tax Resolution Services

If you're struggling with back taxes, you can hire either a CPA or a tax attorney to deal with the IRS on your behalf. Even though an accountant is trained in financial matters and an attorney is trained in the law, both can specialize in tax resolution and thus can negotiate the appropriate tax resolution scenario. If you're being subjected to an audit, an accountant may be the right person to go over your financial records with a fine-toothed comb, but you may prefer a tax attorney to speak to the IRS. Consider what kind of help you need and move forward from there.

Money Management Advice

A CPA is there for you year-round, not just during tax season. He can help you budget for next year's taxes, or for upcoming expenses or desired purchases. An accountant in your area may also be able to advise you regarding investments and expenditures, as well as overall financial trends. While a tax attorney may be able to do this, again the services of a lawyer will cost much more than the services of an accountant.

The lines between the various tax experts continue to blur. You may find an accounting firm that specializes in tax law, or a tax lawyer who advises clients on money matters unrelated to taxes. The most important thing is to do your research before making a decision. The right tax specialist can make tax season stress free.

About the Author

Penny Jones is a money management expert and a senior Internet marketing strategist at Prospect Genius, a leader in local
online advertising.