When is Hiring a Tax Attorney Necessary? 


As time passes, life becomes more and more unpredictable, and you never know if and when you’ll face a complicated tax situation that calls for outside, professional help. However, if you’re lucky enough, you might need to hire a tax attorney only to help you with your real estate planning, and the overall dealing with tax matters throughout your life will be a straightforward and seamless process. 

Nevertheless, some taxpayers have difficulties reporting overseas investments, face IRS audits, owe back taxes, and encounter challenging life events that can have serious tax consequences like foreclosures or short sales. 

Whether you face an IRS audit or want to create a real estate plan for your successors, in this article, we’ll discuss everything you should know about hiring a tax attorney and when it makes sense to hire them in the first place.

What A Tax Attorney Does 

In a nutshell, a tax attorney is a lawyer who specializes in tax law. They assist people in organizing their finances, optimizing their tax situations, adhering to tax regulations, and resolving disputes with the IRS and other tax authorities. Furthermore, some tax attorneys specialize in areas like real estate taxes, others in business taxes, international taxes, and so on.


In general, tax attorneys often practice tax law at accounting firms, law firms, or are sole practitioners, meaning they own their business and work for themselves. Tax attorneys’ primary job is to advise clients who might be natural persons or legal entities about what they should do to get favorable tax treatment in different situations. 

When It’s Worth To Hire A Tax Attorney 

Some life situations are more suited for hiring a tax attorney than others. The most common situations when you might need the help of an experienced tax attorney include: 

Real Estate Planning 

To begin with, a tax attorney can help you formulate real estate planning strategies and handle the needed paperwork involved in minimizing real estate taxes, transferring assets to family members, setting up trusts, and other tactics. 

For real estate planning, it’s wise to go with a tax attorney from your local area since they’re specialized in your state’s laws and regulations, so, for example, if you reside and your property is in Las Vegas, it’s best to go with experienced Las Vegas tax law attorneys to help draft the paperwork and advise you regarding tax implications.    


IRS Issues 

If you’re currently being audited by the IRS or owe taxes to the IRS, it’s in your best interest to immediately contact a tax attorney. An attorney can represent your case before the IRS and often prevent enforcement action like asset seizures, bank levies, and wage garnishments. Furthermore, a proper tax attorney can help you resolve the tax issue and educate you to prevent the problems from reoccurring in the future.

Starting A New Business 

Suppose you’re launching a brand new business. In that case, you can hire a tax attorney to help and educate you on the tax issues and implications concerning the taxation of various business entities and tax effects on business owners. Furthermore, if your newly established business will have employees, a tax attorney can assist you in understanding your requirements regarding withholding taxes, 941 returns, and federal tax deposits.

Buying A Rental Property 

Suppose you consider purchasing a rental property, but you don’t understand depreciation and how the rental property will affect your individual income tax return. In that case, a tax attorney (who will most likely be acting as a quantity surveyor in this scenario) can help you comprehend these issues and help you take the full benefit of the federal tax code and reduce your personal income tax using a tax depreciation schedule Sydney.

What To Look For In A Tax Attorney 

When looking to hire a tax attorney, here are the three most important things you should check about them and their business: 

  • First, they need to have a law license. You can verify whether an attorney has a license to practice law by searching your state’s bar association website. 
  • Also, the tax attorney you’re about to hire is vital to have advanced education or specialization in tax law. Some have a master’s degree in taxation, while others have CPA licenses. 
  • Finally, your tax attorney should have a valid preparer tax identification number (PTIN) as anybody who prepares tax returns in exchange for payment must have a PTIN from the IRS. 


Final Thoughts 

Now that you know when it’s appropriate and fitting to hire a tax attorney, make sure that you have one on your contacts list for when the time comes. And when the time comes, consult with the tax attorney of your selection to be a few steps ahead of the situation, regardless of whether you’re planning to draft a real estate plan or you’re getting ready to launch your new business. 

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.