Filing your taxes is a complicated process, so it’s not difficult to make mistakes or forget to include crucial information.
Whether you’re a business or an individual, there are certain times when you may need the help of an experienced tax lawyer.
Before you panic, read on to discover five major signs that you might need to call a tax lawyer before (or after) tax season.
1. You’re Planning to Start a Business
If it’s a dream of yours to start a business, it could be a good idea to hire a tax lawyer before you start. These attorneys will help you navigate the possible tax-related outcomes you might encounter.
The taxes you deal with largely depend on your business’s entity type. Business types vary from Sole Proprietor to LLC, S-Corp, and C-Corp. Each one has its own unique requirements when it comes to tax filing.
When you look for tax lawyers, make sure you choose one who specializes in business taxes. They can make sure that your new business is structured correctly and help you understand the ins and outs of business tax. They’ll also go over the pros and cons of different business structures with you to help you make a sound decision.
2. A Tax Lawyer Can Help with Inheritance Issues
Many people want to leave a large sum of money or some property to their children or other heirs. If this is something you’re planning to include in your will, consider enlisting the help of an estate-planning attorney.
Most filers won’t need the assistance of an attorney if you’re leaving anything less than $11 million. However, if your inheritance will be quite substantial, you’ll definitely want to consider a tax or estate attorney to help you.
The IRS rules about leaving assets behind are constantly changing. Even if the sum or property you want to leave to others isn’t in the millions, it’s still worth asking about just to be sure you’re doing everything by the book.
3. You’re Dealing with a Tax Dispute
If you’re being audited or you’re not happy about your current tax return, it may be wise to hire a tax lawyer. Most disputes come in the form of an audit, and your lawyer will be able to communicate directly with the IRS on your behalf.
Having an attorney by your side during any audits will help you communicate more effectively. It’s the attorney’s job to know the current guidelines and to know how to talk to an IRS representative. They can also help you negotiate a settlement, which could save you thousands of dollars in some cases.
Never ignore letters or other notices you receive from the IRS. If you do, they could threaten you with criminal charges and accuse of tax evasion. If you get anything in the mail that causes concern, contact a tax lawyer as soon as possible.
Tax lawyers are also allowed to represent you if you end up being charged with a crime. The best thing to do is to be as proactive as possible and get a consultation with an attorney the moment you get anything from the IRS to avoid it altogether.
4. You Cannot Pay Your Tax Debt
There may be times when the amount you owe the IRS seems like an impossible mountain to climb. In cases like this, an offer in compromise might be the best route to take.
An offer in compromise is usually accepted by the IRS if you cannot pay the full amount as a lump sum, nor can you pay it in installments. In rare cases, there could be instances where there’s doubt as to your actual tax liability, too. Speak to a tax lawyer if you feel the amount you owe is incorrect so they can help you.
Another way you could receive an offer in compromise is if paying the taxes would cause you economic hardship or if it would be “unfair” due to health issues or other problems. No matter what the reason, an experienced attorney knows how to navigate these situations to help you settle for less.
5. The IRS Accuses You of Wrong-Doing
In some cases, the IRS may notify you that you’ve done something wrong with your taxes, which means you’ll be subject to an audit. When this happens, it simply means that the IRS needs to perform a formal examination of your official tax records.
In the instance of an audit, a certified public accountant could help you sort things out. Try to hire an accountant first since using a lawyer may indicate that you’re already admitting guilt. If the accountant can’t get the numbers to work, it’s time to consider a tax lawyer.
Tax lawyers can help you appeal your audit or represent you if you end up facing criminal charges. Never try to fight the IRS alone in court since you’ll need someone who understands the nuances of how the process works.
Don’t Let Taxes Scare You
From starting a new business to facing a possible audit, it’s crucial to know when you should hire a tax lawyer for help. Use these five signs to help you determine if hiring an attorney is the right choice for you.
With patience and perseverance, you can face any challenge that comes your way when it comes to taxes. Let an experienced attorney guide you through so that you can handle the issue in confidence.
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