There’s a Few Important Differences
We talk with a lot of folks about tax resolution and tax debt reduction, and often times we use the terms Tax Expert and Tax Pro. We typically get the question – “What’s a tax pro? Is that like a lawyer or something?” It’s a great question because we get a chance to be an educator on tax resolution. We’ll cover the differences and the times when you’ll need an IRS tax attorney vs. an IRS tax relief specialist.
There’s Actually Three Professionals When it Comes to Tax Resolution
Tax Attorney (Tax Lawyer)
An Attorney has completed a Juris Doctor program (law school) and passed the bar exam for the state they practice law in. Most Attorneys handle a variety of legal matters for clients, so they typically don’t specialize in tax resolution, which would be defined as a niche area to practice in the legal world. They can, however, be helpful if litigation or other legal services are involved in a tax resolution case. That could apply for a criminal tax case, or a highly complex tax audit with potential legal implications.
Certified Public Accountant (CPA)
CPA’s are required to maintain a license through the American Institute of Certified Public Accountants (AICPA). A CPA is primarily responsible for accounting and auditing of financial statements. CPA’s can operate in virtually any area of finance, and therefore do not necessarily specialize in tax resolution. They have detailed tax knowledge, but mostly apply that expertise to tax preparation and tax related accounting. Many businesses will keep a CPA on payroll to handle both functions.
Enrolled Agent (EA for short)
EA’s must meet stringent criteria and renew annually to maintain their enrollment status with the IRS. Unlike CPA’s and Attorney’s, EA’s focus 100% on taxation – so they are well versed in handling tax resolution, IRS tax debt relief, and IRS tax debt reduction. EA’s deal with the IRS constantly, and tend to get priority from the IRS when resolving a tax case or doing tax debt settlement. They are widely considered to be the best expert of the three for the majority of tax resolution cases.
Should You Use a Tax Attorney, a CPA, or a Tax Relief Specialist (EA)?
Our advice is to get the most bang for your buck, which will vary depending on your case. A tax attorney is generally the most expensive to hire, and may not have the same level of experience dealing with the IRS. For a tax resolution case, hiring a tax attorney would be like hiring a brain surgeon to treat a common cold – they can get the job done but you’ll get a big bill and they may not be as savvy as a generalist/MD. A criminal tax case would be an optimal time to reach out to an attorney who specializes in tax.
A CPA is relatively affordable, but typically doesn’t have an extensive background in IRS negotiation. For a tax relief case, hiring a CPA would be like using a flathead screwdriver when the job calls for a Phillips head – it’ll probably work, but your screw might get unnecessarily bored in the process. If you need some complex tax preparation to be done, a CPA is a good choice.
An Enrolled Agent is a true tax relief specialist, so they are a fit if you need to review options to resolve an unpaid tax debt to the Internal Revenue Service. They probably aren’t as cost-effective for simple tax preparation or basic tax questions, as they typically look to work with individuals and businesses with more than $10,000 of tax debt.
Don’t forget to look up information on the IRS website or via phone with an IRS rep. They publish a lot of documentation and forms, and work hard to make things as clear as possible. It can be difficult to get a hold of a real person because of long phone-hold times, but it is an option. Hope this insight has been valuable. Feel free to share your comments below if you have a story to share!