Tax Attorney: What They Do, How To Decide If You Need One

If you find yourself needing legal help or advice with regard to taxes — whether it’s to set up a business, manage your finances in a tax-smart way, create an estate plan, deal with an overdue tax debt or handle a tax dispute with the IRS — then a tax attorney might be for you. Here’s what you need to know.

What is a tax attorney?

As the name implies, a tax attorney specializes in tax law. A tax attorney will have graduated from law school with a Juris Doctorate degree (JD) and may also have continued their education by graduating with a Master of Laws (LLM) degree specializing in taxation.

Some tax attorneys are also certified public accountants (CPAs). This means they earned college credits in accounting, passed the CPA exam and, depending on the state in which they practice, have worked under the supervision of a CPA for at least one or two years.

Keep in mind that tax attorneys have different areas of focus, so if you’re looking to hire one, be sure to ask about their area of expertise.

What does a tax attorney do?

Tax attorneys specialize in different areas, including:

Prepare legal paperwork and filings necessary to start a business. Tax attorneys can help set up a new business, also known as entity formation. They can help decide which business structure is best for your company by providing tax classification consulting. They can also prepare necessary paperwork, including an operating agreement and other required documents.

Create an estate plan. If you want to set up a trust or will, or want advice about managing your wealth for future generations, a tax attorney can help.

Advice on tax issues. A tax attorney understands the ins and outs of tax law and can help an individual or business owners plan their finances in such a way that they reduce their taxes.

Manage tax audits, collections and disputes. If a business or individual has a tax issue, such as an audit, tax debt or dispute, then a tax controversy attorney or tax debt attorney may be able to help. These attorneys know how to communicate with the IRS, as well as with state and local taxing authorities. Also, they can set up a power of attorney (POA) to communicate and negotiate on your behalf.

How to find a tax attorney near you

Word of mouth from friends. One way to find a good resource is through word of mouth. But when you ask a friend for a referral, also ask for details about the services the tax attorney provided. While that attorney might have been a great fit for your friend’s situation, they might not be the best person for you, because tax attorneys vary in terms of specialities and what services they provide.

Word of mouth from attorneys and CPAs. While one attorney or CPA may not be a fit for your needs, they probably know someone who is a good fit. “It does not matter whether it’s a corporate, family, law or bankruptcy attorney [who makes the referral], because we’re in a very tight network,” says Olena Ruth, a tax resolution attorney and adjunct tax professor located in Denver, Colo.

State bar association website. Every attorney who practices in your state has to be registered with the state bar association. On each state site you can search by specialty and location to find someone near you who focuses on what you need.

IRS website. The IRS maintains a public list of professionals qualified to prepare tax returns. Keep in mind that these individuals have different credentials and skills, so you want to carefully pick someone who will best fit your needs. For example, audits can be handled by CPAs and enrolled agents (EAs), but a tax resolution or tax debt attorney may be able to better help you with your specific needs.

“The tax resolution attorney differentiates from other professionals [because they have] the right to represent the client at the U.S. tax court,” Ruth says. This is needed when “an audit or collection goes too far and you need to file a U.S. tax court petition.”

What to ask a tax attorney before hiring them

How will they communicate? It may be difficult for an attorney to tell you when and how often they will communicate because their workflow may be hard to predict, Ruth says. Most communication will be by phone or email, but requesting your preferred mode may make it easier for you to stay on the same page.

How much do they charge? An attorney will either charge a flat fee for a project or an hourly rate. Since many attorneys won’t know the exact depth of what they need to do for your specific case, such as a debt attorney or tax resolution attorney who is resolving a tax matter, many will charge by the hour. A corporate attorney who is helping create a business or an estate attorney who is drafting a trust may charge a flat fee.

What steps are involved? When you’re ready to hire an attorney, ask them what steps are involved in the process. What kind of roadmap do they anticipate having to follow? What is the typical timeline? What type of agreement needs to be signed? Is there a retainer fee or an upfront fee to secure their services? When is payment due?

How to get free legal help for taxes

The IRS website. IRS.gov has a list of low-income state clinics. “Every state has low-income taxpayer clinics,” Ruth says. For example, in Colorado there is a clinic at the University of Denver and another at Colorado Legal Services. To qualify, the applicant’s income needs to be below a certain threshold and the amount in dispute with the IRS needs to be less than $50,000.

Legal firms. Some firms may provide free advice, Ruth says. “If it’s a relatively simple question, some tax attorneys can answer quickly on the phone.” More complicated matters will require a meeting and possibly a hefty fee.

State bar associations. State bar associations may have a section on their site where they list attorneys who offer their services pro bono to those in need.