Whether it’s an individual or a business, the tax season can be extremely pressurizing. If it’s the first year of filing the complex taxes or you’ve caused years of tax debts to pile up – help is always there. However, it is recommended that you don’t move into this territory by yourself. But you have to entrust a professional to do the work. Two common options that you can think of while considering tax work include certified public accountants (CPA) and tax attorneys. The CPA vs. tax attorney thing is real. But what exactly is the difference between a tax attorney and a CPA? And to determine who will be the correct fit for you at any given time, keep a tab on the IRS case status.
Just in case you didn’t know, tax debt is no simple matter. As per the specifics of your tax situation, decide who will serve the purpose and accordingly, hire tax preparation experts in India.
Who is a CPA?
When it comes to accounting, a CPA license is a prized credential. This is owing to the level of knowledge and expertise the person has. With a licensed CPA, career opportunities are likely to witness a new high. Also, one can expect to earn more as a professional. The accountants must pass the CPA exam and fulfill all such state-oriented training and work experience, essential to obtaining the licenses. Considering their license in the concerned state, they have the necessary certification to practice only in that state that has granted the license.
Among the major functions and services they dispense, few are enumerated as under:
- Preparation and provision of tax advice: CPAs are responsible for preparing the income tax returns for both businesses and individuals, and other financial purposes too, like property taxes. They offer add-on advice to clients about the status of their tax situation and the best ways to save money, to reduce the liability burden.
- Financial statement audits: CPAs can make a career, just by preparing taxes. However, that’s not what defines their complete range of potential services. They regularly audit financial statements of clients, alongside offering expert advice, as and when needed.
- Forensic accounting services: When a business undergoes embezzlement, for instance, the CPAs dig through the financial records of the concerned firm, to ‘uncover’ any fraudulent act.
- Consulting services: Any problem that arises in the business, but not limited to financial aspects only, can be resolved smoothly using the services of CPAs.
Who is a Tax Attorney?
Much like CPAs, Tax Attorneys are also trained in accounting and finance. But they’re more specialized in tax-related matters of the federal and state levels, municipal rules, and policies. This includes property acquisitions, estate planning and transfers, and business transactions that generate “complex tax liability”. Apart from their knowledge, they’re also licensed to practice law. As a result, you might see them hired by law firms dispensing tax services.
The range of services that tax attorneys offer, include:
- Representation of clients in courts: Tax attorneys must represent their clients in the Tax Court, Court of Appeals, admin appeals, and also the US Supreme Court.
- Representation while IRS audit is in progress: The attorneys represent clients routinely, while the audit is held by the IRS.
- Offering legal advice: Tax lawyers are the best sources to obtain legal advice about anything related to tax liability. In any given situation, tax attorneys are better equipped to render help when the tax situation involves complex court matters. The court matters involves account levies, property lien, and wage embellishment.
- Attorney-client privilege: Unlike a CPA who is not entitled to any legal shield, a tax attorney guarantees the protection of attorney-client privilege. Almost anything you say is likely to be divulged to the IRS or the court. But not with a tax attorney who knows how to keep your information confidential.
CPA vs. Tax Attorney – What must you choose?
Keep the tax matter as the deciding force, to understand the difference between a tax attorney and a CPA, and what you must opt for. For example, a complex personal or even business-related tax issue can be dealt by the CPA. When it’s about debt collection notices or tax controversy, then stick to the tax attorney.
Both CPAs and tax attorneys can assist you with tax decisions, planning and even minimizing tax penalties. From the financial standpoint, the CPA has a greater edge. But while legally, get your attorney to pull you out of the rut. Now that you know, the CPA vs. tax attorney thing shouldn’t bother you much. You can exercise your own discretion and hire tax preparation experts in India, whenever required.