We all know that tax evasion is a felony that may result in imprisonment, right? But, there are experts who help you lawfully take advantage of loopholes and tax deductions to reduce taxes.
They are called tax attorneys!
Businesses that do not intend to keep struggling with IRS over increased taxes need the services of tax attorneys.
Actually, every business needs a tax attorney and we are here to explain all the “why’s” you may need to be answered.
In addition, it is important that you do not mistake a tax attorney or lawyer for a tax accountant.
Unlike tax accountants who are skilled in managing financial records and preparing tax returns, the tax attorney is more planning and dispute-oriented. He is primarily trained to help minimize a business’ tax liability through the structuring of assets or to represent them through tax-related litigation.
We will explain this better in later sections. Meanwhile, you will find the table of contents above.
Who Is a Tax Attorney?
A tax attorney otherwise known as a tax lawyer is a tax specialist who helps clients, which can be businesses, corporate organizations to navigate and comply with the complex system of tax codes.
Tax attorneys are first and foremost lawyers who specialize in the technical field of tax law.
They basically help businesses legally take advantage of tax deductions, credits, and exemptions. They also represent clients in tax disputes.
Tax lawyers can work in both private practice and public practice. As practitioners, they can assist both individuals and businesses by working in-house or with the government.
It has become popular for corporations to hire tax lawyers on a contract basis when tax matters arise. Estate planners and property experts usually require the services of tax attorneys often.
What Does Tax Attorneys Do?
As we mentioned earlier, the duties of tax attornies ponder on solving tax-related problems encountered by people in the running of their businesses.
They do this by conducting legal research using computer databases. They read extensive material regarding tax law changes and negotiate with the IRS and other tax authorities.
Tax attorneys analyze evidence such as bank statements, tax documents, receipts, payroll records, and invoices. They draft letters, memoranda, and contracts; participate in conference calls and meetings, and make presentations.
Why Every Business Needs a Tax Attorney
We will describe some of the peculiar reasons every business needs a tax attorney.
Firstly, corporations hire tax attorneys to give them advice on the legality of their commercial transactions. Since tax attorneys extensively study tax regulations that revolve around industries, they’re the best professionals to consult before making business decisions.
Their advice helps organizations to make informed decisions as regards legislative developments, financial decisions, and employment/payroll issues.
Secondly, for issues such as forming a corporation or nonprofit organization, bankruptcy, joint ventures, and corporate restructuring, the services of these experts are required.
Every country and region has particular tax laws that govern formation of corporations, bankruptcy, et all, violation to them may result in messy tax evasion suits. And this may cripple the company and reduce its shares.
Businesses require the services of tax attorneys for tax audits, tax disputes, property tax appeals, investments, and setting up trusts.
Whenever a company has tax issues with IRS, it is a tax attorney who represents the said company. Therefore, we can say that TAs negotiate with relevant tax authorities on behalf of an entity.
Additionally, a tax lawyer can help in getting the IRS to accept an offer in compromise.
To make this determination, the IRS looks at your income and assets to determine your “reasonable collection potential.” You’ll also provide detailed information about your financial situation and the tax attorney will be available with tax laws and rules that will aid this compromise.
They also help individuals and companies set up trusts that will maximize tax advantage.
Lastly, since laws change by the day to accommodate new possibilities, tax lawyers are needed to review legislative updates, IRS rule changes, and recent case law to stay current on changes in tax law.
They read, synthesize, and analyze the federal tax code along with other tax laws to ensure client compliance. You wouldn’t want to get sued for committing a tax fraud you never knew existed.
So, to conclude, here is a list of why every business needs a tax attorney. Tax lawyers are needed by businesses for:
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Are there Businesses That do not need Tax Lawyers?
Yes, there are companies that are termed exempt by IRS. They are generally classified as non-profit and charity.
Organizations that fall into this category include business and trade associations, educational institutions, healthcare organizations, public charities, homeowners associations, and social service providers.
What Are The Specialties of Tax Lawyers Businesses may need?
- CORPORATE TAX:
These lawyers ensure compliance with tax laws, rules, and regulations.
If your business needs advice on corporate governance, mergers and acquisitions, and other matters, contact a corporate tax attorney.
2. EXECUTIVE COMPENSATION:
These tax experts basically deal with state and federal regulations on pensions, and employment matters. They advise and draft policies and provisions on the said subject.
3. EXEMPT ORGANIZATIONS:
We already mentioned that exempt organizations such as business associations, educational institutions, healthcare organizations, public charities, homeowners associations, and social service providers do not pay tax.
However, there are instances where they pay tax. These tax experts will inform your business about these situations.
4. INTERNATIONAL TAX PLANNING:
These specialists provide counsel regarding tax issues relevant to companies engaged in global business activities, as well as individuals working or retiring in foreign countries.
5. MUNICIPAL FINANCE:
These tax lawyers help local governments with issues such as tax compliance with regard to capital projects, infrastructure, transportation, housing, school districts, and industrial revenue and economic development bonds.
6. TAX LITIGATION:
Trial lawyers handle cases in federal and state tax courts. They also negotiate with the IRS, provide defense in criminal tax prosecutions, and represent clients in disputes with taxing authorities.
Learn how to pay Fewer Taxes.
What is the Cost of Hiring a Tax Attorney?
Hiring a tax lawyer can be expensive. That is why companies rather employ them to be part of the organization or contract them to work when need be. The average cost of hiring a tax attorney is at least $200 to $500 per hour.
Tax attorneys are trained to help you plan, resolve disputes concerning tasks by either structuring the business or representing them through tax litigations.
This article has fully explained the duties of these experts, their areas of specialties and why your business needs their services.
Stay out of crime by employing the services of tax lawyers.
The Wealth Ciricle cares!