Though every business and individual has to pay tax, the American tax code is quite complex to navigate. If you fail to follow the tax code when filing or structuring your taxes, the Internal Revenue Service will be hot on your trail.
But despite the complexity of the American tax code, it is relatively easy to handle your taxes. Nonetheless, some situations may be too complex for you to take on. In such scenarios, hiring a tax attorney to help you navigate the tax code and provide legal advice is advisable.
Thus, here are three situations that warrant hiring a tax attorney.
1. The IRS Wants to Audit You
When facing an IRS audit, it is advisable to hire an accountant to help you figure out the numbers. Nonetheless, you should also hire a tax attorney to help you navigate the auditing process and the regulations that govern it.
A tax attorney can help you prepare all your tax documents so that you do not contradict or omit any information during the tax audit. Furthermore, a tax attorney can help you prepare for the IRS representative's questions, so you do not compromise yourself. Thus, hiring a tax attorney before an IRS audit occurs can help you avoid complications during the audit.
2. You Are Facing a Tax Crime Charge
Depending on an IRS audit's outcome, you may face charges for one or more tax crimes. Common examples of tax crimes you could face include:
- Tax evasion
- Tax fraud
- Falsifying your tax information
- Failing to file your taxes
Hiring a tax attorney should be a paramount priority in such a scenario. The sooner you hire a tax attorney, the sooner they can review your charges and start working on a defense plan. A tax attorney can also help you save money by avoiding a scenario where you have to go to court by negotiating with the IRS on your behalf.
For instance, a seasoned tax lawyer can negotiate a reasonable tax repayment plan with the IRS if you are facing a charge for withholding back taxes. By doing so, your tax lawyer will enable you to comfortably pay your tax debt without going bankrupt or struggling financially.
3. You Can't Pay Your Tax Debts
After an audit or tax court ruling, you may owe the IRS a huge tax debt that is not within your means to pay. In most cases negotiating a tax repayment plan would be your first option. However, if the terms of the repayment plan do work in your favor, there is a second option you can try.
Instead of negotiating a repayment plan, a tax attorney can help you apply for an offer of compromise. An offer of compromise allows you to repay a fraction of the tax debt you owe instead of the total amount.
The IRS rarely accepts offers of compromise. Hence, to improve the chances of getting your offer accepted, you need to hire a tax lawyer to help you navigate the application process.
