Do I Need a Seattle Tax Attorney, Enrolled Agent, or CPA?
Tax issues can come in a variety of shapes and forms and result in as many potential penalties and problems. So it’s not surprising that several types of tax professionals can potentially help you. The most common are the tax attorney, enrolled agent (EA), and certified public account (CPA). All work with tax issues, but which one should you hire for your particular tax concern?
The short answer is that for most tax issues, any of them will usually work. But you don’t want to just find someone who can handle a particular tax case. Instead, you want to find someone who can handle it the best and do so as cost-effectively as possible. To figure out which tax professional you should hire, let’s first examine the three different types. If you want to learn more about how a tax attorney can help you, contact Seattle Legal Services and set up a free consultation.
Tax Lawyers, EAs, and CPAs: Education and Experience
A tax attorney is a legal professional who graduated from law school and passed one or more state bar exams. The primary focus of a tax lawyer is to understand the regulations, codes, and laws that relate to taxes. When necessary, a tax attorney can represent clients in court, most often in U.S Tax Court and U.S. District Court.
To become a certified public accountant (CPA), a person must usually need at least five or so years of post-secondary education. Because this requires more time than what’s needed to earn a four-year bachelor’s degree (which will usually be in business, finance, accounting, or a related field), many CPAs will also have a master’s degree in accounting. One to two years of experience working in the field under the supervision of a CPA is also usually necessary, along with passing the CPA Exam.
An EA (enrolled agent) is a tax professional who’s licensed by the IRS and can represent taxpayers as clients in most matters before the IRS. To become an EA, an individual must pass the Special Enrollment Exam (also known as SEE). In some cases, a former IRS employee can become an EA without passing the SEE if they have obtained a certain amount of experience and knowledge from their time working for the IRS.
To keep their credentials active, all three of these professionals must complete continuing education requirements on a regular basis.
What Do EAs, CPAs, and Tax Lawyers Do?
All three of these professionals can represent you in front of the IRS, and they usually handle a wide range of tax matters, such as:
- Prepare and file tax returns
- Provide tax advice
- Represent taxpayers before the IRS in collection matters, audits, and appeals
- Apply for an offer in compromise
- Negotiate and set up an installment agreement
As you can see, there’s a good chance that if you want to hire a tax professional, an EA, CPA, or tax lawyer can likely help you. But there are some situations where it may be more advantageous to hire one type of tax professional over the other.
When to Hire an EA, CPA, or Tax Attorney
As a general rule of thumb, the best person to hire will be the one who has the most experience handling your particular tax matter. If you have a tax question about your business’ payroll, then whichever EA, CPA, or tax lawyer has the most knowledge about payroll should probably be the person you hire. That being said, there are several advantages that come with hiring a tax attorney over a CPA or EA. These may or may not be important to you, depending on your tax needs.
First, confidentiality is strongest with an attorney. EAs and CPAs must maintain client confidentiality, but this promise to keep a client’s information secret is far less robust than the attorney-client privilege. If you tell something to your tax professional, it’ll be easier for an attorney to refuse to divulge those communications to the IRS or a court should your tax professional be served a subpoena.
Second, tax attorneys have far broader rights to represent clients in court. A tax attorney can represent clients before the U.S. Tax Court and most other federal courts, like District Court. They may need to be admitted to practice in a particular federal district, but that process is largely ceremonial.
In contrast, EAs and CPAs cannot represent clients in court. The one exception is if the EA or CPA passes the Tax Court Exam, but this is difficult to do and takes a lot of time. Also, passing the exam only lets the CPA or EA represent clients in U.S. Tax Court and not district court or any other federal or state court.
Third, tax attorneys are usually far more knowledgeable about the criminal repercussions of certain tax decisions. An EA can tell you what to say and how to say it before the IRS while a CPA might be ideal for developing the best way to reduce your taxable income. But for figuring out whether something is against the law or what type of criminal penalties you could face for a particular tax move, a tax attorney is the best choice. If you need help because the IRS thinks you’re guilty of tax evasion, a tax attorney is the first person you should contact.
Frequently Asked Questions
Aren’t tax attorneys more expensive than CPAs or EAs?
They can be, but it’s a common misconception that they usually are. How much any tax professional charges will be based not just on how much time or effort it took to obtain their professional credentials, but also their level of expertise, geographic area of practice, level of experience, and overall skill. In many tax cases, a CPA or EA can be more expensive than a tax attorney.
Can an EA or CPA help me even if I have a legal tax question?
Yes and no. They can probably help you, but they probably won’t (or will be very careful to qualify the advice they give). The moment it becomes evident your tax needs become legal in nature (especially involving a potentially criminal matter), it’s best that they refer your case to a tax attorney. They’ll want to do this because they don’t want to exceed their scope of practice by giving legal advice that should normally come from an attorney.
They also don’t want to obtain potentially incriminating information from you that won’t be protected by attorney-client privilege. If you were to get arrested, the prosecutor could potentially subpoena your EA or CPA for evidence to use against you at trial. This wouldn’t be a risk if you consulted with an attorney instead of an EA or CPA (absent certain exceptions).
Should I hire a tax attorney even if I could hire an EA or CPA?
There are at least two reasons why it might be best to hire a tax attorney over an EA or CPA. The most important reason is if you need a service or benefit that only a tax attorney can provide, such as representation in court or attorney-client privilege. But another reason to hire a tax attorney is because it’s usually easier for them to offer a wide variety of services.
For most taxpayer needs, a tax attorney is more likely to be able to “do it all.” This is primarily because attorneys can handle criminal and other legal matters that involve litigation in addition to offering tax advice. This isn’t to say you should always look for a tax lawyer when you need tax help.
EAs may have more intimate knowledge and greater experience negotiating with the IRS and CPAs might offer better advice concerning the business side of taxes. But there isn’t a law or restriction that prohibits tax lawyers from doing either of these things. However, there’s little most EAs or CPAs can do if they need to represent clients in court or keep client information secret from a subpoena.
This is one of the benefits of hiring Seattle Legal Services, PLLC. John Georvasilis is a tax attorney who focuses on helping clients with a wide range of federal and state tax issues. If the IRS contacts you about unfiled tax returns or unpaid taxes, he can help with that. If you’re starting out with crypto investing and want to know what your tax obligations are, he can advise you on what taxes you have to pay, when to pay them, and how to pay them. Our tax services can also help with:
- Unfiled tax returns
- IRS penalty abatement
- Unpaid taxes
- Tax levies
- Tax liens
- Innocent spouse relief
- Currently not collectible status
- Audits
- Offers in compromise
This is just some of the type of tax help you can get from Seattle Legal Services, PLLC. There’s also the ability to help you if your tax issue leads to the possibility of criminal charges.
Thinking About Hiring a Seattle Tax Professional?
Depending on your tax concerns, it’s possible that an enrolled agent or certified public accountant may be best suited for you. However, if you’re not yet sure who will be best, starting with a tax attorney is a good choice.
Contact Seattle Legal Services, PLLC by phone at 425-428-5262 or online. We’ll be more than happy to learn about your particular situation and help you decide what your options are for obtaining the best resolution possible.