Do I Need a Tax Attorney When I Have an Accountant?

While a certified public accountant (CPA) or tax professional  is probably your first call for a tax-return related issue, if the IRS is investigating your returns, you may want to call an attorney that specializes in tax litigation. “Most of our referrals come from other tax attorneys and CPAs that realize that the issue is beyond the scope of what they really do. Certainly, if there is anything that is criminal or potentially criminal, you have to be careful because accountants don’t have the privileges that attorneys do,” says Miami based tax lawyer  Alan L. Weisberg.

“We only do controversies—both criminal and civil—with respect to taxes,” he continues. “When we get involved in a case, the dollar amounts are very large and they are being contested by the IRS; or, it’s a potential criminal problem, or they have a serious tax problem and they need someone who is going to be more adversarial than an accountant.”

If you receive a letter from the IRS alleging that your tax return was not accurate, there are many things you can do. Weisberg describes fighting these allegations as a multi-step process. The first step is attempting to prevent the case from being referred to criminal investigations, and in turn prosecution.

“At each of these levels, historically, the percentage of getting a case killed goes down,” Weisberg says. “The higher up you go, the less likely you are going to get them killed. If it gets to the U.S. attorney’s office, you either go to trial or you negotiate a deal, which is ultimately the client’s decision after close consultation with a lawyer. A lot of what we do is administrative, and we can prevent it from going to tax court. There are all kinds of procedures that make these cases controversies rather than litigations.”

If someone has a serious tax issue Weisberg says, “The single biggest way to help these situations is to prevent the client from making matters worse for themselves. There is a high correlation to a taxpayer talking to the IRS before being represented, or being represented by an accountant, and a criminal prosecution. If the client never speaks to the IRS, we have a much better chance of preventing an indictment.”

Tax controversies, Weisberg says, can come when people try to deal with the IRS themselves. “They can either respond to the question of ‘did you report all of your income?’ which would incriminate them, or they can lie, which is worse,” he says. Quite simply: “You cannot bamboozle the IRS.”

The definition of a serious problem is different to each person. “If a client owes the IRS $50,000 and that’s going to create a serious problem for them, then that’s a serious problem,” Weisberg says. “I don’t want to turn a small issue into a big deal. Anytime a case has potential to be criminal at all, that’s a serious problem. If it is something that is going to affect one’s livelihood or their business, it’s serious.” It is a case-by-case basis.

“Many times, I will refer a matter back to an accountant or someone else if they can handle it,” Weisberg adds.

The best advice that can be given if the IRS is investigating you is to contact a law firm and seek legal advice from a reputable and experienced tax attorney. If you want more information on this area of tax law, see our tax overview.