How To Find the Right Tax Attorney: Tips & Tricks
Finding the right tax attorney for you and your family’s needs can be a challenge. These next few years will be particularly challenging because of the many recently changed laws, especially the Tax Cuts & Jobs Act, the Secure Act 1.0, and the anticipated Secure Act 2.0. This article will help you understand how to choose a tax attorney that understands your situation within this everchanging legal landscape.
In this section, you’ll find several valuable tips on your search. First, we will explain what a tax attorney is and what he or she can do. Second, we’ll discuss why you might need a tax attorney. Then you’ll learn about cases when you need to hire a tax attorney and how to find a perfect match.
What Is a Tax Attorney?
Most people understand the term “lawyer” or “attorney” as an expert in nearly anything connected to law. First, that is very far from the truth. Secondly, even if it seems an attorney is an expert in everything, you do not want to become a victim of false promises. An expert in one thing is always better than a Jack of all trades.
A tax attorney is a licensed attorney with specialized training, experience, or credentials primarily in law and an adjacent area or a specialty in tax, such as State & Local Tax vs. Federal Tax. As far as my experience is concerned, I am a tax attorney who leverages their experience to improve my estate planning practice. Conversely, many colleagues of mine only focus on estate tax issues. We are all tax attorneys. The difference is that my practice area looks at the broader implications of tax and, therefore, a larger community. Meanwhile, their practice is laser-focused on taxational issues that affect wills, trust, and estates. There are tax attorneys who only litigate issues of base erosion and profit shifting between the U.S. and Panama. The field of tax law appears nearly as big as the field of law itself in many ways.
Why You Need a Tax Lawyer
There are more people than you think who may need a tax lawyer. If you have a possible outstanding tax liability from any municipal or governmental entity that is more costly than $1,500—you should probably consider speaking to a tax attorney. Keep in mind that speaking to a tax attorney is not free. Only a few tax attorneys may offer free consultations. My firm provides free 30 minutes consultations, if for no other reason than it is the courteous thing to do, especially in Iowa. Every state and practice is different.
As a general rule, always respond to any correspondence from the Internal Revenue Service within a timely manner. The hardworking civil servants of the IRS go out of their way to help the public understand deadlines and procedures. Depending on your specific situation, the letter will even provide contact information for a point of contact.
When To Hire a Tax Lawyer
There is a clear difference between a need for consultation and hiring a tax attorney. The decision of whether to hire a tax attorney is either proactive or reactive. If you are reacting to life or the IRS, you might hire an attorney. If you are being proactive, then most definitely, you hire a tax attorney.
Return of investment
Proactive tax and legal planning of nearly any kind have a tremendous return on investment. The goal of tax planning is to reduce the tax burden of a particular person or entity. A reduction in tax liability can mean opportunities for savings, retirement investing, real estate investment, or an emergency. Consider investing more fully in life insurance coverage, tax-excluded retirement vehicles, and necessary home improvement. Of course, after COVID and the pandemic, it could be a good idea to take a vacation or at least invest in personal wellness.
All the correspondences, especially those called “Notices,” should be addressed for up to two business days. Those correspondences will also give you information on free taxational advice from the IRS. This may seem counterintuitive, but the IRS is mandated to serve the public. If you do contact any branch of the IRS, document the call and remember to be egregiously sweet and kind to whomever answers.
If you have failed to respond to Notices, have failed to file your taxes for years, or have forgotten to mention a large windfall of money like a prize, there is a good chance that the IRS wants to chat with you. Before you chat with them, hire an attorney with all your information. This is especially true if the IRS has already placed a levy, lien, or has obtained a judgment against you. Failure to respond may result in a default judgment against you.
Where To Look For a Tax Attorney
In this section, we’ll discuss how to find a tax attorney.
Contact your state or jurisdiction’s bar association
Contact your state or jurisdiction’s bar association. These are non or not-for-profit associations of attorneys that will direct you to an attorney licensed in your state with expertise in tax. Such organizations typically do not show a preference for any particular member, and the service is free. In Iowa, we use “Find-a-Lawyer”. There is also the Cornell University Attorney Directory, but it is a web only.
Check reputable attorney search websites
Consider going directly to a reputable attorney search site such as Justia.com, Avvo.com, and Lawrina.org. These sites will describe what specific attorneys practice and help you find a professional who holds themselves out as tax attorneys.
Try a local tax association
If you have not had any luck on Google at this point, try a local tax association. These are organizations of various tax professionals that may be able to assist you. They typically contain attorneys, CPAs, accountants, and bookkeepers.
TOP Five Tips on Finding a Reputable Tax Attorney
Now, let’s review the top five tips on finding a reputable tax attorney and the most important things to consider.
Double-check one’s specialization
It can be challenging to find a tax attorney, and it’s only the first half of the battle. The tax attorney has to specialize or have expertise in the area of tax law your situation dictates. For example, if you are trying to find counsel in a state tax matter, do not confuse it with an estate matter. That was an attempt at tax humor, but alas, tax is no laughing matter. So, ensure your tax attorney is knowledgeable in the area where you need assistance.
Review credentials
Anytime you hire a lawyer, make sure they are an attorney licensed to practice law. This may sound obvious, but there are many dubious characters. You can verify that the person is an attorney in every state via your State’s court commission or attorney registry.
Check lawyer’s insurance
It may not be a credential, but make sure your attorney has insurance. Not every state requires attorneys to have insurance, so there are many who practice without it. Much like a doctor, you want a valued professional to have proper insurance coverage.
Learn about licensure
Understanding which licensure a tax attorney should have is a challenge sometimes. At a minimum, the attorney should be in good standing with every court they are a member of — that means more than just that state. Taxes can be assessed by a municipality, state, or the federal government. It is essential that the tax attorney you contact can represent you in your matter in the proper venue. There is a state court for state tax matters. There is a federal tax court that, in a strange twist of law, is different from a federal district court. A tax attorney should typically have at least the federal district court bar membership or licensure.
Review one’s experience and education
It is hard to quantify the value of experience versus education when discussing tax law. They are both necessary components of a successful counselor. Although I have an LL.M. in tax, my specialization is tax planning. Therefore, if you have a matter already in litigation, it would be better to contact a tax litigator with decades of experience.
Tax Attorney vs. CPA
The distinction between a tax attorney and a CPA is best to be explained from their perspectives. A CPA frequently may not be an “artist,” so to speak, but rather an algorithmic thinker. That is very important when working with large data sets and pools of numbers, and various sets of books. But, CPAs oftentimes are criticized for lacking creativity. That is a bit of a broad stroke, though, as that may be more apropos of those that simply majored in accounting and did not achieve the status of CPA. A Certified Public Accountant must meet minimum levels of education and experience and pass a challenging exam. That level of expertise is handy.
A tax attorney tends to be more of an artist and less of an algorithmic thinker. Algorithms are equations and codes used to solve complex math problems exclusively. A creative thinker sees your family as a dynamic group of people that will evolve and change over time. Tax attorneys like myself have expertise in planning for the future — proactive tax planning. Tax attorneys often need to hire CPAs and accountants for themselves and their own practices. That last fact is not a bad thing but a telling thing about how tax attorneys examine a taxational issue.
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Final Words
All of the above recommendations are general and intended for a public audience. Always seek out legal advice from a professional that is familiar with your set of facts. Tax is a challenging concept even for tax attorneys. We can debate over minutiae of IRS regulations and Department of Labor rules until we are blue in the face. In every instance, the most important thing is to be 100% comfortable with the tax attorney you have decided to consult.
