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CPA vs Tax Lawyer: What's the Difference?

When it comes to handling complex tax matters, it's not always easy to do so on your own. Tax language and tax laws are detailed, complex, and often difficult to understand.

It's for this reason that you might consider hiring a tax specialist to help you with your tax issues. For the most part, you can get the help you need from two different types of tax specialists: CPAs (Certified Public Accountants) and tax lawyers.

Each of these types of tax specialists serves a valuable purpose, but how do they differ? Let's review the highlights for each.

CPA vs Tax Lawyer


1. Typically Less Expensive Than Tax Lawyers

In general, CPAs are more affordable than tax lawyers. This is because the potential responsibilities of a CPA are limited in scope when compared to those of a tax lawyer.

This isn't to say that CPAs are always inexpensive. In fact, in some cases you may be able to find reputable tax lawyers with rates that are competitive with CPAs.

But it's important to remember what exactly you're paying for. When you pay for a CPA, you're essentially paying for sound financial advice as it pertains to your taxes. On the other hand, when you pay for a tax lawyer, you're paying for legal advice as it pertains to your taxes.

2. Great For Straightforward Tax Planning

If you're on the hunt for a specialist who can help you complete your taxes, a CPA might be what you're looking for. CPAs are well-educated in the realm of tax language, and can assist you in finding all of the tax breaks and deductions which are available to you.

However, when it comes to legal litigation, CPAs hold only limited power. Though they can help defend clients against the IRS, they are typically not equipped to defend clients in a court of law.

If you owe back taxes or are in litigation regarding your taxes, it's recommended that you augment the services of your CPA by hiring a tax lawyer at the early stage of the conflict with the IRS or the state tax authorities. . In serious legal cases such as these, you would be much better served by a tax lawyer.

Tax Lawyer

1. Excel in Litigation

Tax lawyers are not only law school-educated individuals, but individuals who have passed the bar exam in their respective states. They have an extraordinarily deep knowledge of tax law, both federally and at the state level.

For this reason, tax lawyers are the experts you need to turn to when you find yourself in the midst of tax litigation. Defending yourself against any form of tax litigation is a daunting task, and should not be taken lightly. In order to excel in litigation, you need an experienced tax lawyer on your side.

2. Best For Businesses

If you're the owner of a business, you would greatly benefit by having a tax lawyer on retainer. Businesses are constantly involved in processes where detailed tax code is at play, from selling goods, to trading out of state, and more.

While CPAs are often educated in tax code, they don't have as deep a legal understanding of that code as tax lawyers do. A tax attorney will ensure that you're obeying tax laws, and will help you keep the IRS at bay.

3. Ideal For Audits

If you're being audited, the only type of tax specialist you should consider is a tax lawyer. You will need a tax lawyer on your side not only to prove that you're faithfully meeting your tax responsibility, but also maximizing your chances of escaping the process relatively unscathed. .

CPA vs Tax Lawyer: Which is Best For You?

If you run a business or if you're engaged in an audit, you would be best served by a tax lawyer. Are you in search of a tax lawyer currently? If you live in the Chicago area, the experts at John J. Pembroke & Associates can help you.

Our firm has decades of experience in providing tax assistance to businesses and to those who are dealing with litigation. We're more than prepared to assist you with whatever you need.

Contact us to schedule an appointment!

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