When Should I Hire A Tax Attorney?

When To Hire a Tax Attorney

When you owe back taxes to the IRS, the last thing you need is another bill. So, it’s natural to wonder if you can solve your tax debt on your own without having to hire an attorney and spending thousands of dollars you probably don’t have.

The truth is that most tax problems can be resolved without having to hire an attorney, assuming you’re willing and motivated to learn how to do it yourself. This article will give you some more detailed guidelines for deciding when you should hire a tax attorney.

Do you need to hire a tax attorney?

You might not need to hire a tax attorney if all the following are true:

  • You owe less than $50,000 to the IRS
  • You are not self-employed or do not own a small business
  • You do not have unreported income or other indicators of tax fraud
  • You have not been contacted by an IRS Revenue Officer
  • You’re not intimidated by the idea of talking to the IRS
  • You’re willing to spend time figuring out the correct forms to use and how to fill them out

The above criteria mean that your case is fairly simple and straight forward. It’s likely that you can handle resolving such a case on your own without spending money on expensive help. However, it’s going to take some work. Just like any DIY project, you’re going to save money with sweat equity.

We offer an online course that will teach you how to solve your tax debt problems by yourself.

You probably need to hire a tax attorney if any of the following are true:

  • You owe more than $100,000 to the IRS
  • An IRS Revenue Officer is assigned to your case,
  • You are self-employed or own a small business
  • You have a complicated or unusual financial situation
  • You’re intimidated by the IRS and don’t feel comfortable talking to them on your own
  • You’re willing to hire someone to save yourself the time and stress of trying to figure it out yourself

If any of the above characteristics describe your situation, you stand a good chance of getting a better outcome by hiring a tax attorney than you would on your own. This is because your case is more complicated and is going to get more scrutiny from the IRS. It would be smart to have a tax attorney to prepare your financial documents and handle the negotiations. This could mean the difference between acceptance and rejection of your offer in compromise, or paying more for your offer than would otherwise have been required.

You must hire a tax attorney if any of the following are true:

  • You have unreported income or other indications of tax fraud
  • You have undisclosed foreign bank accounts
  • You owe more than $1,000,000 to the IRS
  • You have valuable assets that you want to protect and keep away from the IRS

If any of the above apply to your situation, then it would be very wise to at least consult with a tax attorney to evaluate your case and then hire one if appropriate. You are in the “danger zone” of IRS tax collections and could be looking at forced asset sales, business closures, criminal tax prosecution, and other negative consequences that can last for years to come. At the very least, you should find and consult with a qualified tax professional for a review your case.

Beware Tax Debt Relief Companies

Chances are you’ve already received a bunch of direct mail advertisements from various companies, law firms, and CPAs offering to help solve your tax debt. Beware the promises these companies are making. There are a lot of dishonest tax resolution providers who will prey on your desperation and take advantage of you while you’re at your lowest point. They are notorious for charging outrageous fees and doing nothing to actually resolve your tax debt.

To avoid getting ripped off by one of these companies, you should do as much research as possible. Learn about the options for resolving your tax debt, and try to get a grasp on what is realistic in your case and what isn’t. Also, find out as much as you can from independent sources about anyone you are considering hiring — and be especially wary of anyone from out of state. Here’s more information about how to avoid tax resolution scams.

The Bottom Line

The bottom line is this: 90% of tax problems can be resolved without hiring a tax attorney. But, if you’re unsure, then you need schedule a consultation with an experienced tax attorney to make sure that it’s safe to handle your tax debt on your own.

If you’d like to learn more about our online course that will teach you how to solve your tax problem by yourself.

**This page is for informational purposes only and does not constitute legal advice. If you have a tax problem, we strongly urge you to consult with a tax attorney. Self-help should only be considered after meeting with a tax attorney to evaluate your case.**