Why Use a Tax Attorney Rather Than An Accountant or Tax Professional?
Generally, a tax attorney can do everything a CPA, accountant or other tax professional can do and more.
A tax attorney, as well as a non-attorney tax professional, can always help the taxpayer with resolving issues informally, and at the administrative stage before the agency. However, only an attorney will have the formal education, and the license, to be able to represent a taxpayer in a judicial proceeding, such as federal, state or bankruptcy court.
Under current law, an enrolled agent (a tax professional who has passed a special exam approved by the IRS) can represent a business or individual before that agency. Furthermore, some non-attorney tax professionals, if they have passed a special exam approved by the US Tax Court are permitted to practice in that court. However, only attorneys can do all the foregoing, plus represent a taxpayer in other judicial forums (assuming the attorney has been admitted to that specific court).
In that way, a tax attorney can offer and explain any and all options, and not just the ones a tax professional can perform and has experience with.
The other advantage that a tax attorney will have is that the information you give to the attorney while seeking legal advice is protected from disclosure under the so-called attorney-client privilege. Generally, the rules of evidence in a judicial proceeding protect communications between a client and his attorney in the course of seeking legal advice. For reasons of policy, courts have determined that a full, frank and candid dialogue between a client and his attorney should be encouraged without fear it may later be disclosed at trial.
At this time, there is no similar, generally-recognized privilege for communications between a client and his CPA, accountant or other tax professional. It’s something to think about, particularly when the taxpayer’s problem has, or may have, criminal implications.