Smart Reviews

5 Times You Will Definitely Need a Tax Lawyer

We all like to hope that we won’t need an attorney, but we also like to have that one “lawyer friend” just in case. If you find yourself in any of these situations, you’ll want to go ahead and call him up. Trust us.

1. When You’ve Gone Bankrupt

Declaring bankruptcy is hard enough by itself. You don’t want to find yourself worrying about how your bankruptcy has affected your taxes. A tax attorney can help you with your case and ensure that you don’t get stuck with hefty fines, legal fees, or jail time on top of your recent misfortune. For example, a tax attorney could tell you whether your federal income tax debt can be wiped out.

2. When the IRS Is After You

If you are involved in an IRS audit, are under criminal investigation by the IRS, or have committed tax fraud, you need a tax attorney. During an audit, the IRS will examine your tax return to make sure that your tax deductions and income are correct. A criminal investigation by the IRS is more extreme than a civil audit. The IRS investigates possible criminal violations of the Internal Revenue Code. Tax fraud, or tax evasion, is when taxpayers avoid paying their taxes, usually by giving misinformation to the IRS.

3. When You’re After the IRS

Suing the IRS? That’s a pretty big undertaking. Don’t go it alone. If you hire a tax attorney that has experience with the IRS, you’ll have a valuable source of knowledge, a good consultant, and someone to represent you in court. As someone who has been through this before, your tax attorney knows exactly how to help you win. Did you know that there are three different courts where you could battle the IRS? You might not, but your tax attorney should, and they can figure out which court would best serve your case.

4. When You’re Starting Your Own Business

Personal taxes are very different from business taxes. You wouldn’t want to get yourself in a mess with the IRS because you made an honest mistake while filing your taxes. Consulting with a tax lawyer can help you avoid making a costly error. When starting your own business, you may want to hire a tax professional, like a lawyer or accountant, to assist you long-term. In order to find a good one, you should ask friends and colleagues for personal referrals, check advertisements, and look at professional associations. Be sure to interview several potential attorneys and find someone who you’re comfortable with.

5. When You Want To Protect Your Family’s Inheritance

When you pass away, you want to make sure that you don’t saddle your family with large taxes on whatever inheritance you may have left them. A tax attorney can help you decide the best way to set up the inheritance to minimize the taxes. For example, whether you want to set up a trust fund for members of your family or stick with a straightforward will.

Tax attorneys are valuable financial assets. They may seem like a costly luxury, but they can help you with issues that no one else can.

 

Featured Image Source: DepositPhotos / alexraths