What's the Difference Between a CPA and a Tax Attorney?

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The thought of tax season can bring on a sense of dread for many people. But there are qualified professionals whose jobs are to help others through the complexities of tax preparations, filings, and payments. In this article, we’ll cover the main differences between two of these professionals: CPAs, or certified public accountants, and tax attorneys. We’ll also discuss how to determine which of these you may need to enlist for help, depending upon your financial circumstances. 

What is a CPA?

A CPA, or certified public accountant, obtains their certification through an intensive course of higher education in managing finances and business records. CPAs are highly familiar with federal and state tax laws and will not only help their clients to abide by all laws and regulations, but also strictly abide by regulations that apply to their certifications as well.

Due to a combination of their intensive training and the gravity of their impact on individual and business finances, CPAs are held to a very high standard. In order to maintain their professional licenses, CPAs adhere to the AICPA (American Institute of Certified Public Accountants) Code of Professional Conduct.

So, what does it take to become a CPA? The typical CPA will have completed at least a year’s worth of college coursework beyond that of a bachelor’s degree, and many have master’s degrees. Their training prepares them to go further than an accountant or bookkeeper: a CPA must also pass a four-part exam covering audit and contestation, regulation, financial reporting and accounting, and core business concepts. After this, a CPA works under the supervision of a licensed CPA for 1,800 while also taking continued education courses of 120 hours every three years. In other words? CPAs know the American taxation system and its impact on citizens and businesses inside and out.

What is a Tax Attorney?

Tax attorneys and CPAs share a deep understanding of the American tax system. But where CPAs excel in financial and business records, tax attorneys excel in litigation, negotiation, and other aspects of America tax law.

A tax attorney may in some cases begin their formal education in a similar manner to a CPA; perhaps by obtaining a bachelor’s in economics, business, or another related area. After receiving their bachelor’s, a tax attorney candidate must prepare for and pass the rigorous LSAT (Law School Admission Test). Most Juris Doctor degrees take three years to complete, followed by more preparations to pass a state bar exam in one or more states in order to become certified to practice law. Similar to the AICPA’s role, each state’s bar association maintains tight guidelines that attorneys must adhere to in order to keep their licenses. They also must regularly obtain continued education in legal topics in order to keep their bar membership active.

While the rare tax attorney may be able to assist you with preparing tax returns and other accounting tasks for an additional fee, most attorneys are not actually accountants and will not hold the same detailed skillset. Instead, tax attorneys specialize in all things related to the IRS tax code, such as tax disputes, estate planning, business tax law, and more. As you can probably guess, a tax attorney can provide you with the type of deeply experienced legal counsel that a CPA can not ethically or practically advise you on. Below, we’ll take a look at some instances when a CPA can be of assistance versus instances when a tax attorney is required.

How Do I Determine if I Need a CPA or a Tax Attorney?

Many people enlist the help of a CPA for their personal or business tax needs. Anyone who needs to file tax returns can hire a CPA for a reasonable fee. Maybe you’re feeling overwhelmed and are too busy to file your own return, or perhaps your financial situation has changed and you're uncertain as to how that will impact your filing. Or maybe you’re just inexperienced—everyone starts somewhere, and these are all good reasons to consider hiring a professional to help out.

Other common reasons for hiring a CPA include:

  • Owning, selling, or merging a business
  • Starting a new business and taking out loans
  • Deciding on cash versus accrual accounting
  • Managing multiple employee payrolls
  • Determining which deductions or credits you may qualify for
  • Minimizing your tax liability
  • Navigating changes to tax law that can affect you
  • Seeking expert advice for financial planning or budgeting
  • Going through an IRS audit
  • Becoming proactive towards preventing fraud
  • Requiring regular, monthly, or yearly help with accounting
  • Undergoing a marriage, divorce, inheritance, or other life change with tax implications

Some CPAs may also be qualified to assist you with more complex matters involving the IRS or tax court, such as liens, levies, back taxes, wage garnishment, or IRS negotiation. However, as most good CPAs will tell you, these situations will benefit most from a tax attorney, particularly if legal counsel or representation is needed.

If you are dealing with any sort of tax controversy, including trouble with the IRS or mounting debt collection attempts, then you should seek out the advice of an experienced tax attorney. A tax attorney can also help you—and your CPA—when you’re not in any sort of trouble. Tax attorneys specialize in the deep, long-term financial planning and structuring of assets that are required for creating wills, trusts, and estate plans. A tax attorney knows the precise language that is required for any formal, legally binding written documents and should be enlisted for these types of documents.

Conclusion

While CPAs and tax attorneys can both assist you with tax planning and making important financial decisions, each professional has their own unique set of qualifications and skills that set them apart from the other. If you need help with accounting, you can rely on a CPA to make that tax season stress a thing of the past. If you need advice or representation when it comes to IRS troubles, major debts, and other disputes, then a tax attorney is most likely your best option. Request a consultation with our qualified tax attorneys today to discuss your unique needs.

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