If you run a business, you will probably know how important it is to be particular about returns and taxes. Despite doing everything right, you may still have to interact with the IRS once or more.
Any interaction with the tax authorities is stressful, whether you are on the right side of the law or not. Tax matters are often complicated and you may not be able to handle them on your own.
Hiring a tax attorney to represent you and deal with the IRS is the best thing to do. There are some situations when you should not think twice about collaborating with them; rather, the sooner the better.
Here are some common incidents when a tax attorney can be helpful.
#1 Facing an IRS audit
When you are facing an IRS audit, no one but a tax attorney can help you. The entire process is complicated and even a single wrong step can get you trapped.
It can lead to high penalties, additional debts, and even criminal litigation. A tax lawyer can represent your case and get it resolved if you are wrongly implicated.
If you are found guilty of tax evasion, they still deal with the IRS on your behalf. Though you will have to pay the penalty, an attorney can negotiate a feasible payment plan with the IRS.
#2 Handling tax-related court cases
While some tax issues can be resolved with negotiations, others go into the courtroom.
If you expect criminal proceedings by the IRS or plan to file litigation against them, you will need legal help. Tax cases are always complex and you cannot expect to get a favorable judgment without legal representation.
If you are being investigated for tax fraud, you need the best lawyer to represent you otherwise you may end up in the jail and also have to pay a heavy fine.
#3 Buying or selling a business
Buying or selling a business is another situation when you should consult a tax lawyer.
These are going to be huge transactions and only a seasoned lawyer can suggest the best way to lower your taxes legitimately. Further, they can help you with specific issues as well.
For example, someone buying a business may need to realign employment taxes. It is best to have expert employment tax attorneys to help. Also, a law professional can help you manage negotiations and other legal matters at this stage.
#4 Starting a new business
When you start a new business, there are several things that you need to consider. Taxes are perhaps on the top of the startup checklist because the type of entity you set up determines the tax treatment.
Do you want to set up a sole proprietorship? Is it going to be a partnership firm or do you want to incorporate? A tax lawyer is the best person to guide you about the tax treatment in your case.
In fact, they may also have some non-tax advice that may be useful for your startup.
#5 Leaving an inheritance to heirs
Besides business matters, another situation when you must consult a tax attorney is when you have assets that you want to leave an inheritance to your family members.
Obviously, you want to ensure that they receive the maximum value of the assets rather than pay hefty taxes on inheritance. This requires estate planning and a tax attorney is surely the best person to help in this context.
They can guide you about planning your estate in such a way that the tax burden on the heirs is the minimum.
#6 Complete tax planning
Besides these specific circumstances, you may also need help with general tax planning. Whether you are a salaried individual, running a business, doing a home-based job or business, you will need to plan your taxes.
The idea is to save up on them by claiming the appropriate deductions. At the same time, you should be regular with the returns and taxes so that you are not penalized for missing deadlines. With a seasoned tax lawyer to guide you, it becomes possible to have a proper tax savings and payment plan in place.
Obviously, you can save yourself from trouble with the IRS if you follow a proper plan.
Now that you know about the situations when a tax attorney can be helpful, you should definitely avail of their services at such times. Although you may have to pay their legal fees, you may end up saving a great deal of stress and money.
They can save you from the wrath of the IRS, which is something that no taxpayer would want to face.