A tax attorney can save your business money in the long run. They are familiar with the complexities of the ever-changing Tax Code and government rulings that impact businesses.
When looking for a qualified tax attorney, ask around for recommendations and research online. Check their credentials and find out if they charge a flat fee or bill hourly.
1. Tax Compliance
Tax laws change frequently and can be complicated. A good business attorney stays on top of these changes and understands how they impact your business.
They can advise on the best way to classify your business’ income and determine your tax liabilities. This is especially important because incorrect classifications can lead to fines and penalties.
A good attorney can also help you avoid problems like commingling personal expenses with business ones, which is something that the IRS takes seriously. This is a common mistake that can cost you big time in the long run. They can help you keep track of your expenses and separate them accordingly.
2. Tax Disputes
If the IRS issues you a tax bill you think is incorrect, you can file an appeal with them. This process involves providing evidence, a statement explaining why you think the tax bill is incorrect and a formal protest of the amount owed.
A good tax attorney will know how to prepare these documents and fight the IRS on your behalf. They will also be able to negotiate lower payments or debt settlements with the IRS. When choosing a tax attorney, ask about their credentials and testimonials. Also, find out how they charge for their services and whether they offer a free consultation.
3. Tax Planning
While tax law is a complex topic, a good attorney will help you make the most of your tax dollars. This means you’ll avoid unnecessary taxes and pay only what you legally owe.
Whether you need to determine how much your business will owe this year or assist with general tax planning that follows mandatory IRS guidelines, a tax lawyer can provide the assistance you need. They can even step in to negotiate with the IRS on your behalf and help you minimize your debt in some cases.
Choosing the wrong tax professional can be costly for your business. Learn the difference between a CPA and a tax attorney so you can select the best one for your business.
4. Tax Audits
There’s nothing that can strike fear in the hearts of a small business owner more than receiving an IRS audit letter. A good tax attorney can help you get organized and provide information to the IRS in a way that minimizes your exposure to liability.
The majority of IRS audits for individuals are through “correspondence examinations,” which involve a computer-generated letter from the IRS asking for specific information related to certain items on your tax return. Office and field audits are more in-depth, with agents visiting your place of business (or home if you’re an individual) to ask questions and review documents. A tax attorney can help you prepare for these more intense audits.
5. Tax Litigation
Tax issues can be costly, especially when it comes to penalties and interest payments. A business tax attorney can help you manage your taxes to reduce the risk of expensive surprises.
A tax attorney can also represent you in litigation with the IRS or other government agencies. They can assist you in resolving disputes through negotiation or appeals processes. They can also file a petition in federal tax court on your behalf, if necessary. In addition, they can serve as a liaison with state and local taxing authorities. This includes helping you determine your business’s state tax obligations and assisting with filing state sales and use tax returns.
6. Tax Debt
If you have tax debt, a tax attorney can help you resolve it. They may be able to negotiate an offer in compromise or set up a payment plan for you that will allow you to pay off your debt within the statute of limitations.
A lawyer can also help you avoid garnishments and liens, which can seriously impact your business. They can even help you reduce the amount you owe by disputing the validity of any deductions or fees that you claim.