why would a lawyer handle personal taxes

A tax attorney can help you better understand tax policies and laws and how they can impact you or your business. Tax attorneys often advise clients on wills, trusts, inheritance, personal wealth management, and estate planning. They can also help negotiate tax obligations, handle litigations and represent clients in audit hearings or court cases.

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What can a tax lawyer do for You?

A tax lawyer can help you file delinquent returns without breaking the bank. Installment Agreements: If you can’t pay your entire tax balance in a lump sum, an installment agreement could be a smart choice. A tax attorney can create a feasible installment plan and make your case to the IRS.

What types of tax cases do tax lawyers handle?

Case Type: Tax lawyers handle a wide variety of case types, and some require much more investigation than others. For example, more straightforward delinquent filing cases may cost less than more complex issues like audit defense and representation.

Should you meet with your tax attorney in person?

You could spend hours driving back and forth to meet with your tax attorney in person when you could use that time to work, relax, or spend time with your family instead. You could rack up a large bill very quickly simply by exchanging pleasantries with your attorney.

Should you hire an IRS tax lawyer for back taxes?

Since tax attorneys’ settlements and resolutions can help you save substantial money on your back taxes, however, you may end up with a positive bank balance after hiring an IRS tax lawyer. Most attorneys charge by the hour. Most local tax attorneys charge by the hour, other companies work on a set price basis

Can an attorney negotiate with the IRS?

The review of your case and the effective communication with the IRS can be invaluable in paving the way to productive negotiation efforts in reaching an acceptable tax settlement. Your attorney can negotiate on your behalf in negotiating things such as installment payments and offers in compromise.

How do legal settlements avoid taxes?

How to Avoid Paying Taxes on a Lawsuit SettlementPhysical injury or sickness. ... Emotional distress may be taxable. ... Medical expenses. ... Punitive damages are taxable. ... Contingency fees may be taxable. ... Negotiate the amount of the 1099 income before you finalize the settlement. ... Allocate damages to reduce taxes.More items...•

Does a lawyer pay taxes?

Income tax is different from service tax. Lawyers have always had to pay income taxes, personal or corporate. If they don't pay right income taxes, that's because of evasion or availing of legitimate exemptions.

Do I have to pay taxes on settlement money?

Settlement money and damages collected from a lawsuit are considered income, which means the IRS will generally tax that money. However, personal injury settlements are an exception (most notably: car accident settlements and slip and fall settlements are nontaxable).

Why is it important to hire an experienced tax attorney?

An experienced tax attorney can apply their knowledge of the tax code to save you thousands in unnecessary and inaccurate tax payments. CPAs and attorneys who don’t specialize in tax matters rarely have this same knowledge, so it’s important to hire an experienced tax attorney when dealing with major tax liabilities.

What is tax attorney?

Only a tax attorney is qualified to represent you in a court of law and provide you with legal advice and guidance. When you work with an attorney, you also receive the protection of the attorney-client privilege, which means all the information you discuss with your lawyer will remain confidential.

What to do if IRS accuses you of tax fraud?

You’ve Been Accused of Tax Fraud. It should go without saying that if the IRS accuses you of income tax evasion or tax fraud, you need to hire an attorney right away. If you’re facing criminal charges, then your assets, your livelihood, and even your freedom can be on the line.

Why do lawyers use arguments of fact and law?

Lawyers are trained to use arguments of fact and law to persuade others to agree with them, and that includes the tax bureaucracy. In one instance, I stopped an audit of my client’s business dead in its tracks because I persuaded the auditor that the law he was relying on did not apply to my client after all!

Can the IRS ignore statutes?

The IRS can ignore a legal textbook, but they cannot ignore statutes and case law!

Does the IRS make mistakes?

The Internal Revenue Service frequently makes mistakes. Besides the unavoidable factor of human error, the IRS relies on outdated computer systems that are very prone to errors. So, when the IRS says you owe an outstanding tax debt and related penalties, you shouldn’t just take their word for it.

What can a tax lawyer do?

Tax lawyers can help you both before you have a tax debt issue and after the IRS has contacted you to resolve tax matters. They can handle the following: Researching Cases: Tax lawyers investigate IRS cases to identify problems and determine potential solutions.

What can a tax attorney do?

A tax attorney can build a case in your defense and represent you in court if necessary. Delinquent Tax Returns: Filing outstanding tax returns allows you to bring your account with the IRS current, but filing late can also lead to substantial interest fees and penalties.

What are the benefits of having a tax attorney?

Some of the biggest perks include: Tax attorneys can resolve complex tax issues. If you’re dealing with a serious tax debt issue, you need an experienced professional on your side. Tax attorneys specialize in resolving high-level tax problems like wage garnishments, tax liens and levies, and penalty abatement.

What happens if the IRS releases a lien on your property?

Tax Lien Release: If the IRS places a tax lien against your property, selling assets like your car or your house can become impossible. A tax attorney can work with the IRS to release its lien on your property and find another solution for repaying your tax debt instead. Wage Garnishment Removal: When the IRS threatens to start collecting its debt ...

How to hire an IRS tax attorney?

When you hire an IRS tax attorney to resolve your tax issues, it’s important to make sure you work with a reputable professional. Reviews and ratings can tell you a lot about how tax lawyers work with clients, but only the attorney’s bar association can tell you whether they’re in good standing. Check your attorney’s listing on their state bar association website to make sure they’re the reliable professional you expect.

What is Hurricane Tax?

Hurricane Tax prides itself on being a full-service tax relief firm that employs tax attorneys, CPAs, and EAs. However, the firm specializes in complex issues like releasing tax levies and liens and lifting wage garnishments. Hurricane Tax can also assist with establishing IRS installment agreements.

What degree do tax attorneys need?

Some also go on to earn a Master of Laws in Taxation (LL.M.) degree, which provides specialized preparation for working in tax law. Finally, tax attorneys have to pass the bar exam administered by their state’s bar association. This exam requires rigorous preparation and proves attorneys’ competence at practicing law.

What do tax lawyers do?

Of course, they specialize in helping people file tax returns and responding to IRS audits, but take a look at all of the ways in which a tax lawyer could assist you! 1. When You Owe Back Taxes.

When do you need to hire a tax lawyer?

1. When You Owe Back Taxes. Not everyone who owes taxes needs to hire a tax lawyer. However, if you find yourself in a position where you owe the IRS an excessive amount of money, you may need to look into. This includes if you owe the IRS money from the year or years below.

What is the penalty for not filing taxes?

The penalty for failing to file is 5% of what you owe for up to five months. After that, the IRS can choose to come after you with criminal or legal charges.

Why don't people file taxes?

Most people who don’t file their taxes fail to do so because they know or suspect they’re going to owe money to the IRS and don’t want to pay it.

What happens if you don't pay taxes?

At this point, if you don’t pay, the IRS will send you a final notice, giving you 30 days to request a hearing with a settlement officer.

What to know about tax law?

Facts to Know About Tax Law and Tax Attorneys. Not many people enjoy watching their hard-earned dollars come out of their paycheck every month. They enjoy it even less when they owe taxes at the end of the year. However, taxes go to some pretty important things that we take for granted in our day to day lives.

What is tax court?

Tax Court is a place where citizens can go to refute any claims, allegations, or charges accrued by the IRS. In the event of small claims for relatively low amounts of money, a tax lawyer probably isn’t necessary.

You have a hearing in U.S. Tax Court

In case you are unfamiliar with U.S. Tax Court, here is how it works: the IRS audits you, and you disagree with the audit. After the agency informs you of how they want to adjust your disputed tax return, you have 90 days during which you can file a petition with the U.S. Tax Court. This is your formal disagreement with the IRS.

You want to change the amount of back taxes you will pay

If you agree that you owe back taxes on previously filed years, but disagree with the amount the IRS claims you owe, then this is a different scenario. You are not contesting the bill, merely the amount. For this purpose, a tax attorney can help you with the paperwork process.

You are audited and want to appeal

Appealing an IRS audit is not out of the question, but lawyers who specialize in tax issues will greatly improve your chances of prevailing in your appeal.

Your business is getting audited

Whether or not you want to appeal your business audit, it is wise to consult with tax attorneys in the event of a business audit. Merely the preparation of paperwork alone often calls for legal consultation. Given the inherent risks of a corporate audit, having a better sense for the legal terrain is in your best interest.

Your business is launching

When going into business for yourself — or when entering into a joint venture, an LLC, or any other sort of new business venture — having trusted tax advice is a wise way to begin. The way you structure your business, the way you pay your employees, and the way you make investments in depreciable assets are all subject to taxation concerns.

You have to plan your estate and the finances are complicated

There are many reasons why your estate finances can be complex. It may be that you had multiple spouses, or children from different marriages. It could be that you co-own property, so the estate would be receiving a partial amount of that property value.

You want to file a wrongful disclosure or a wrongful levy claim

If the IRS has levied your property and sold it — for example, repossessing your car to cover unpaid back taxes — you may feel that this action was not correct from a legal standpoint. The legal seizure, if it was done wrongfully, could be overturned.

What can a lawyer do for IRS?

A lawyer can examine your specific tax issue and your financial situation and match you with a solution that will meet your needs. When you’re dealing with the IRS, giving up or ignoring the problem will not make it go away.

Why don't people pay their taxes?

The reason a lot of people don’t pay their taxes isn’t because they don’t want to —it’s because they don’t know how to set up a payment plan that will work with their financial situation. They are intimidated by the amount of their tax bill and can’t see a way out.

What does it mean when the IRS places a lien on your property?

When the IRS places a lien on your property, it is claiming a legal interest in your property . Other liability collectors can do this, too, but the IRS usually has top billing. Your property can be your financial assets, home, vehicles, boats, and other personal property.

What to do if you can't file your tax return?

If you’ve been unable to file a tax return for a previous tax year, an IRS help attorney may be able to take care of that. After you file your past-due return, if you owe taxes, your attorney may also be able to help you set up a payment plan with the IRS or help you take advantage of one of the other programs that meets your needs.

Why can't I pay my taxes?

Some people can’t pay their taxes because they literally don’t have the money to pay them. They may not even have property the IRS can seize in order to pay down the tax liability. It’s these people whose accounts can be placed in Currently Not Collectible status.

Can the IRS release a levy on your paycheck?

IRS Wage Garnishment and Levy Release. The IRS has the right to place a levy on your bank account or paycheck when you’re behind on your taxes. This can be incredibly stressful because you need that money to survive. Your IRS tax attorney may be able to get the levy released.

Can a lawyer fight to get penalties removed?

In some situations, your lawyer can fight to get the penalties on your tax bill removed or lowered. Sometimes, the penalties on the tax bill can be greater than the bill itself. Removal of penalties can make your tax bill easier to afford. In addition, after the penalties are removed, you may be able to reach an installment agreement for ...

What is the attorney client privilege?

The communication between an attorney and a client is subject to the full and well-protected attorney-client privilege. When the IRS is investigating your tax reports (or trying to put you in jail), they frequently ask for testimonies and documents from tax preparers you hired to assist you in filing and financial management.

Is it a walk in the park to file taxes?

Miscalculations and inaccurate filling of tax details is a common problem during filing and can cost you a great deal. Tax filing is not a ‘walk in the park’ kind of task and requires detail, accuracy, and a great deal of expertise.

Is the tax law updated?

The tax laws are updated now and then, and it is almost impossible for the ordinary citizen to keep up with the new changes. On the upside, a tax attorney is well-versed in the tax policies and updated on new tax laws.

Is the IRS a joke?

Tax-related issues should be handled thoughtfully and given careful consideration. Without a doubt, the IRS is no joke, and any mistake from you, your employee, or an unreliable tax preparer could land you into serious problems.

How many pages are there in the IRS tax code?

The current IRS tax code spans more than 1700 pages. Do you have time to read all of it? Will you understand what you have read and know how to apply it to your tax case?

Do IRS agents lie?

Most IRS agents are extremely professional and courteous when engaging everyday taxpayers. They do not employ threatening tactics or lies to get you to pay what you owe.#N#However, you do not want to risk coming up against a rogue agent who might not be above abuse and intimidation when he or she meets with you. When you have a professional tax lawyer by your side, you are protected from such threats. Your lawyer can act as your representative in meetings and ensure that your rights are protected for the duration of your tax case.

Can a tax attorney garnish your income?

Finally, your tax attorney will know what measures to take to protect your income and assets. The IRS has the right to put a lien on your assets or garnish your income to settle your debt. When you hire a tax lawyer, he or she can safeguard your finances by:

What can a tax lawyer do?

Tax lawyers can help you through a tax controversy, or help you avoid one. To get the right lawyer for your needs, you need to know what to look for. To reduce the high anxiety associated with hiring a lawyer and to help you avoid making snap decisions, we've put together a list of seven tips on what to ask a tax lawyer to ensure ...

What does a tax attorney do?

They may negotiate your tax debt or other issues with a government agency, find ways of settling your tax debt, advise you about how best to respond to an investigation, defend you in court, and more. They also handle communications with the government for you.

What are the two types of tax law?

As the personal finance website The Balance explains, there are roughly two types of tax law: tax planning and tax controversies. Tax planning lawyers help businesses and people with high net worths arrange their financial affairs in a way that minimizes their tax burdens and helps them avoid a tax audit. You might want to talk to this kind of tax ...