What Do Tax Lawyers Do?

From tax lawyers to tax debt advisors, it takes an army to navigate the intricacies of taxation. Let’s look at what tax lawyers actually do.

Whether you have a problem with the IRS or just need help filing your tax returns, tax advisors and tax consultants can help you. While there is no special certification for tax law, IRS tax lawyers have a passion for tax law and have experience dealing with the IRS. Here are three ways an IRS tax attorney can help you:

Listen to Your Story and Provide Solutions

While the IRS employs many diligent and courteous professionals, do not expect the IRS to give you a sympathetic ear or provide you with tax advice. However, when you hire a tax professional, he or she is on your side.

Your tax professional will listen to your problem, even if it is just a simple question about how certain income should be reported. The tax professional may research the law and regulations, or may have the experience to provide advice without further research. In either case, your tax lawyer will provide counsel and advice on how to deal with your problem within the bounds of the law.

Act on Those Solutions

Once your tax attorney has suggested solutions for your problem, you will discuss them and develop a game plan. This game plan may involve steps for both you and your tax lawyer. You may be tasked with collecting records. Your attorney may prepare paperwork for filing with the IRS or call the IRS to request additional information or additional time.

For example, when you hire a law firm as tax debt advisors, the firm will likely spring into action since delay can have many adverse consequences for you. The IRS can levy your bank account, which means that any funds in the account are held for 21 days. This means that your bank may return checks from that account unpaid during those 21 days. After 21 days the IRS will take the tax debt owed directly from your account. If this is not enough to satisfy the tax bill, the IRS will file additional levy requests.

In the meantime, your other bills are not being paid by your bank. This could destroy your reputation and your credit history. Tax debt advisors can develop a plan to challenge the grounds for the tax debt or negotiate payment of the debt. The IRS offers a number of payment options and tax debt advisors can help you figure out which options work for you.

In the most serious situations, the IRS may garnish wages, place a lien on property, or even commence a tax seizure proceeding to satisfy a tax levy. In the event that the IRS has made a mistake, regaining your property could take enormous amounts of time, effort, and money. However, tax debt advisors can act quickly to work with the IRS to release the levy.

Help with Planning

It is often said that if you ever win the lottery, your first call should be to a tax lawyer. Winning the lottery is a pretty remote possibility. However, there are many other circumstances where tax planning can make a significant difference in what you keep and what goes to the IRS. For example, if you inherit some money, sell a business, or receive a bonus from work or large gift from your distant aunt, there may be tax implications. Planning with a tax advisor beforehand may allow you to minimize the tax owed and allow you to keep more of what you received.

Tax professionals also keep up with changes in tax law. Tax laws change every year. Some years, the changes are relatively minor, such as adjustments to the tax tables. Other years, the changes are significant. In a recent tax law, the way tax law handled spousal support payments — otherwise known as alimony — was changed for both the paying ex-spouse and the receiving ex-spouse. Interestingly, this change did not depend on when the alimony was paid, but when the divorce agreement was executed. A bit of planning with a tax professional who keeps up with changes in the law could have made a significant difference in the tax treatment of alimony payments under divorce agreements.

Tax lawyers play a number of roles. If you have a tax problem, your tax lawyer will listen to your problem, provide solutions and planning advice, and act on those solutions.