A basic and blanket answer to this question is, it is time to call a tax attorney when you are having legal issues with taxes- but this likely does not give much insight into what kinds of legal issues a tax attorney is best suited to handle.
A tax attorney is typically used for complex, technical, and legal issues, associated with a tax situation. Individuals and organizations with complicated tax situations often need the help of a tax attorney on an ongoing basis whereas, individuals and organizations with more typical tax needs are likely to only need a tax attorney when they are having legal issues with their taxes.
Both tax accountants and tax attorneys are professionals who are available to their clients in their hour of tax needs. An attorney though, is the professional that is best suited to helping their clients fight the law and make sure that their tax rights are upheld. A tax attorney can handle many things that an accountant cannot but CPAs have specialties and skill sets that are often complementary to the work of tax attorneys. For this reason, many of the larger tax accounting firms have in-house lawyers and many of the larger tax law firms, have in-house CPAs.
Tax Agents and Revenue Officers
If you have a complex tax situation and tax agents or revenue officers have become involved in it, there is a good chance you will benefit from the protection of a tax attorney. If the IRS has assigned a revenue officer to your case, or a state or local government has given you notice about a problem with your taxes, it may be in your best interest to discuss your situation with a tax attorney. Even though a CPA is likely versed in why a government entity has a problem with your situation, they are not licensed to go into a legal battle that might wind up in court and would thus not be able to defend your side of the case.
If you are in trouble with the IRS or a state or local tax agency, receiving debt collection notices from one or more of these entities, or involved in a tax controversy, it may be time to protect yourself and your personal and/or business finances with aid of a tax attorney who has experience with successfully defending people in tax situations that are similar to the one you are in now. Many people make the mistake of asking an accountant to help them in these kinds of situations in order to save money compared to hiring an attorney and wind up getting into deeper and much more costly troubles than if they had had the legal protection of an attorney from the onset of their tax troubles.
The services of a tax attorney can also come in handy for tax planning. Tax attorneys are often skilled with coming up with tax plans that minimizes a client’s liability. When you use a tax attorney to help you plan your complicated taxes and to help you make financial decisions regarding your taxes, it often prevents problems from arising with federal, state and local tax agencies.
A tax attorney can work with their clients to solve cases involving major tax debt, liens and other difficult legal issues that may come about for them.
If you have a legal dispute or are being questioned about your taxes by a tax board or government tax agency, now might be the right time to call a reliable tax attorney.