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When Would You Need a Tax Attorney?

A lot of people don’t even know that tax attorneys exist as a separate category of lawyers, but the complexity and the intricacies of the tax law, as well as the fact that it keeps changing for one administration to another, have all contributed to the need for professionals whose job it will be to know the field intimately and thoroughly.

However, even if you know that they exist, do you know when you need to hire the services of tax legal professionals? Here are some of the most common reasons people turn to tax lawyers.

Offshore Accounts

A lot of people, particularly wealthy businesspeople tend to have offshore accounts. When a person does business in a foreign country, more often than not, they will need to have an account in a local bank, which is considered an offshore account in the USA. This is perfectly fine and legal behavior and in most cases, necessary.

However, if you hide these accounts from the IRS, you are committing a criminal act of tax evasion. The IRS has dramatically increased its oversight over these accounts, so a lot of people who may have had these accounts want to come clean and integrate them in their tax returns. Fortunately, there is a mechanism to do this without legal troubles – the Offshore Voluntary Disclosure Program. You can learn more about it here

Estate Tax Issues

If you are compiling your last will and testament, your estate is likely to be inherited by your family. However, there is a matter of the estate tax to be settled first. Starting from 2017, if the total value of your estate exceeds $5.5 million, or $11 million if you are married, you will need to pay this tax. Keep in mind that this figure increases almost every year. In some cases, your heirs may have to pay as much as 40% of the total value for this estate tax.

However, if you hire a tax attorney, they can help you create a diversification plan which will help you remain under the threshold for this tax, thus preventing a serious chunk of your estate from being taken away on account of tax.

Lawsuits against the IRS

Whether it is you who is instigating a lawsuit, or if the IRS has started a process against you, you will need an expert by your side who knows both the tax law code and your current situation. Even though you can consult accountants or other financial experts, but in the courtroom, it pays to have someone who is familiar with the tax code and with the courtroom.

If you are being investigated or even indicted for tax evasion of any kind, you are much better off confiding in a tax attorney, because you are guaranteed client-attorney privilege, meaning your attorney will not divulge your secrets to the court. There’s no such clause with accountants.

You Are Starting a Business

If this is your first time setting up a business, there are likely so many things you don’t know. Having a professional at your side can greatly help you decide about the important issues like whether you should incorporate, or what other kinds of business entities exist and which is the most suitable for your business.

If you work with clients and partners abroad, you need to be extra careful, since international law might be different than domestic.

Tax attorneys are just one of the several professions centered around the tax code. However, what separates tax lawyers from other tax professionals is the fact that they can represent you in court, which is a great advantage.