Whether you’re dealing with the IRS or simply need help preparing your taxes, working with an experienced tax attorney can save you money in the long run. Tax attorneys have the legal training and specialized knowledge necessary to make sense of dense IRS documents. They can also help you maximize your deductions and credits.
Here are six reasons why hiring a tax attorney is a good idea:
1. Save Time
The saying “a penny saved is a penny earned” applies to many aspects of life, including how we handle our money. If you’re a business owner, hiring a tax attorney can save you time and money by avoiding costly mistakes.
Most tax attorneys have extensive, detailed knowledge of federal and state income tax laws. This expertise can help you craft long-term strategies to lower your tax burden.
If you owe back taxes, a tax attorney can negotiate settlements like offers in compromise that allow you to pay less than what you owe. Additionally, many tax lawyers work with support staff that includes CPAs and enrolled agents, which can help reduce your overall costs.
2. Save Money
While tax preparers and CPAs know the ins and outs of the tax code, a lawyer can save you money on taxes through their knowledge of programs like offer in compromise. They can also help you with back tax issues, such as liens and wage garnishment.
Tax attorneys can also help you avoid penalties by determining if you qualify for penalty relief. If you do, a tax attorney can negotiate with the IRS to settle your debt for less than what you owe. That can save you thousands of dollars! This is especially true for those with large amounts of back tax debt.
3. Avoid Mistakes
Mistakes in tax filing can lead to large fines, penalties and interest payments. A skilled tax attorney can review your documents and ensure that you are filing accurately. They can also manage direct communications with the IRS on your behalf and protect your legal interests.
Business owners often face complex tax situations that can be difficult to navigate on their own. Many of these situations involve complicated calculations, and may include eligibility for obscure deductions or valuable tax credits.
Tax attorneys have detailed, specialized knowledge of state and federal income tax laws. They can help you craft long-term strategies that can significantly reduce your tax burdens.
4. Negotiate With the IRS
If you have a tax debt, an attorney can help you save money by negotiating an Offer in Compromise. The IRS offers this program to settle taxpayer debts for less than what they owe.
When negotiating, you need to prepare and present yourself well. A tax attorney has experience preparing for and interacting with the IRS on a daily basis. They also know how to control information given to the IRS so they don’t collect maximum information to use against the taxpayer.
Before hiring a tax attorney, ask them about their fee structure. Many firms charge hourly while others may have a flat rate or contingency fees.
5. Resolve Tax Debts
The longer tax debts go unpaid, the more they will cost you. In addition to penalties, the IRS also charges interest. These interest rates can far exceed the rates on credit cards.
A good tax attorney can help you resolve your back taxes for pennies on the dollar. You may even qualify for a reduction in your debt due to medical and financial hardship, miscalculation of taxes, or taking bad advice.
You’ve probably seen the TV ads where worried people owe thousands to the IRS, and then their attorneys negotiate an offer in compromise for hundreds or thousands less. These are real stories.
6. Get a Better Deal
If you find yourself with back tax debt, a tax attorney can help you settle for less than the total amount you owe. They also specialize in negotiating settlement strategies like offers in compromise that can save you thousands in the long run.
Tax attorneys have detailed, technical knowledge of federal and state income taxes that many people don’t have. Whether you’re facing an audit appeal, a tax settlement, or even a tax forgiveness program, the cost of hiring a tax lawyer could be worth it in the long run.