By: Law Office of Ray Haselman

CPA vs. Tax Attorney: What’s the Difference?

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Every person’s needs around tax time are unique. From a soccer parent with the most boilerplate 9-to-5 job to the owner of multiple billion-dollar earning corporations to a small-time freelancer who streams video games part-time, everyone’s tax needs are as individual as their fingerprints. More and more people are finding that their taxes require more attention than stock paperwork and free software. Those people turn to tax professionals.

Two understand who is best to turn to during tax season; you must know the difference between CPAs and tax attorneys. Each position has its constraints as to how it can help you, but each has its advantages as well. While the subject matter that a CPA and tax attorney can help you with is the same, the situations in which you would need each are markedly different.

What is a CPA?

A CPA, or Certified Public Accountant, is someone who has passed the American Institute for Certified Public Accountants’ (AICPA) Uniform CPA Examination to become licensed as an accounting professional. Becoming a CPA ensures that an individual has the required experience and education as governed by the State Board of Accountancy.

A CPA deals mostly in accounting, bookkeeping, auditing, and general taxation while fulfilling the needs of their clients. CPAs, due to their training and experience, can prepare tax returns while maintaining high integrity and with expertise in financial auditing records. CPAs are efficient in preparing a tax plan. One may hire a CPA to consult in ensuring an entity’s compliance with the law by minimizing tax liability.

After learning the ins and outs of a business or entity through the intimate details of its financial records, a CPA may be able to offer advice in dealing with that entity’s financial future. Hiring a CPA to advise, keep books, file returns, or provide tax and auditing services can cause a business to experience noteworthy profit.

What is a Tax Attorney?

A tax attorney, like all attorneys, must pass the state bar exam to become a qualified lawyer. Tax attorneys specialize in the legal elements of taxes, having immense experience relating to tax law. If one were to find themselves in a tax-related lawsuit, a tax attorney would be able to defend the case. These could include issues related to inheritance misunderstandings, tax-payment irregularities, or tax evasion indictments.

Both a CPA and a tax attorney have the right to represent you in a legal dispute with the IRS (and a CPA could do a very good job, likely having vast knowledge of the inner workings of an entity’s tax history). However, a tax attorney is much more likely to be able to handle the legal matters of such situations.

A tax attorney is a lawyer with a specification or expertise in tax law; this gives them the upper hand over CPAs in legal proceedings. Tax attorneys are great negotiators and can build a strong argument around your business, affecting the overall outcome in your favor.