As tax season nears its conclusion, many people across the country start to grapple with complicated tax situations. The tax system is confusing, difficult to navigate, and overly complex for many people. That is why so many of us rely on experts to handle tax matters. Regardless of your experience level, no one can more successfully deal with the complexities of taxes than the people whose job is to navigate the taxing systems. However, even this element of taxation can be complex.
There are several different kinds of professionals that work in the tax industry. It is a massive field with countless people employed within it, and if you don’t know much about taxes, you may not be aware of who exactly is needed to help you solve your tax-related problems. Two of the types of professionals you’ll hear pop up most often are tax attorneys and Chartered Professional Accountants, or CPAs. Both offer different important services that may become critical to you.
Understanding the difference between a CPA and a tax attorney will be important, as they both fulfill different critical functions. As we near the deadline for this year’s tax season, it is critical to understand the different functions of these two different tax professions. With that in mind, we’re here to help, breaking down the key differences between tax attorneys and CPAs.
Key Differences
There are some core, intrinsic differences between a tax attorney and a CPA. From their education and certifications to the role they play for their clients, they are markedly different. Let’s start exploring the significant differences between these two professionals by looking at exactly what they each provide.
Let’s start with a CPA. A CPA is a more commonly utilized tax advisor for the average person. Whether you are a business owner, real estate investor, or just someone looking to handle their taxes in a less convoluted way, a CPA can likely assist you. The role of a CPA is to handle both financial recordkeeping, tax prep, and the actual filing of taxes. They are advisors and managers that oversee finances in several key areas. They keep books and offer important tax-related advice on business decisions, investments, and general tax questions.
A CPA will also audit an individual or business. They’ll go through your financials, ensure compliance with the law, and let you know areas that need to be improved and areas of strength. They help make better business decisions and avoid crossing legal boundaries.
Those legal boundaries are where tax attorneys often come in. A tax attorney is a licensed legal professional. Unlike CPAs, a tax attorney has their law degree and passed the bar exam, so they are a lawyer that specializes in taxes. CPAs are helpful with filing tax returns and offering tax advice to businesses and individuals. Tax attorneys can offer help in these areas, but it isn’t the primary service that they offer. A tax attorney is more about helping people with tax disputes and handling the legal components of taxation.
One common reason for hiring a tax attorney is fighting litigation and handling IRS disputes. A tax attorney is who you turn to if you or your business is facing an audit from the IRS. They can act as intermediaries and negotiate the situation. An experienced tax attorney can often get clients out of trouble. They are also skilled at handling both the tax and legal aspects of things like estate planning, investments, and more.
Tax attorneys and CPAs can be needed in different circumstances, each with unique advantages. They are both specialists in taxation, although CPAs are more about tax preparation and advice. In contrast, tax attorneys are better equipped at handling the legal aspects of taxing, though they also provide valuable advice.
Taxes can be complicated, but that doesn’t mean they need to be. Numerous industry professionals can provide individuals or businesses with high-quality services that clarify tax-related issues. Depending on your own unique needs, working with a CPA may be the best bet, or working with a tax attorney could provide you with optimal services.
Understanding the difference between tax attorneys and CPAs is an important step in finding the right tax help that you may need. CPAs are best utilized for bookkeeping, tax preparation and filing, and general advice. Tax attorneys can help with legal disputes like the IRS auditing you and understand the legal intricacies of the system. Both have a high-level understanding of taxes and are invaluable resources for businesses and people of all walks of life.
Ready to get started with a tax attorney? Contact me today.