What taxpayers should know about hiring an IRS tax lawyer
A tax lawyer is worth considering when you face an IRS dispute that could lead to legal consequences, such as an audit with serious findings, an unfiled-returns problem, a large unpaid balance or a possible criminal matter. For routine return preparation, an accountant or enrolled agent usually costs less and is enough. The key is to match the professional to the problem.
What a tax lawyer does
A tax lawyer is a licensed attorney who specialises in tax law. They can advise on your rights, speak for you in dealings with the IRS, negotiate payment arrangements and appeal decisions. One advantage is that communication with your lawyer is generally protected by attorney-client privilege, which can matter if facts are sensitive. Check the exact scope of that protection with the lawyer, as it has limits.
Lawyer, CPA or enrolled agent
- Certified public accountant (CPA). Strong on preparing returns, financial statements and tax planning. A CPA can also represent clients before the IRS.
- Enrolled agent. A tax specialist authorised by the IRS to represent taxpayers. Often a cost-effective choice for audits and collections.
- Tax attorney. Best for legal disputes, court proceedings, complex structures and anything involving possible criminal exposure.
Some problems are best handled by a team: an accountant to rebuild records and a lawyer to manage the legal strategy.
When to hire a lawyer
- You have received a notice that mentions a criminal investigation, a summons or a special agent.
- You owe a large amount and face liens, levies or wage garnishment.
- You have not filed returns for several years and need to come into compliance.
- You disagree with an audit result and may need to appeal or go to court.
- Your situation involves complex transactions, trusts, businesses or overseas accounts.
If you receive a notice, read the deadline first. Ignoring it usually makes things worse. A professional can often ask for an extension, but only if they are contacted in time.
How to choose and check
- Verify the attorney's licence with the state bar association.
- Ask about experience with your type of issue, such as audits, collections or international matters.
- Ask how fees are charged: hourly, fixed or a retainer, and what costs are extra.
- Be cautious of any firm that guarantees a result or promises to settle your debt for pennies on the dollar. Settlement programmes have strict eligibility rules.
- Get the engagement terms in writing, including what will be done and who will do it.
What to prepare
Bring copies of the IRS notice, past returns, income records, bank statements and any previous correspondence. Write a simple timeline of events. Be honest with your lawyer, because they can only protect you from facts they know. Do not send documents to the IRS yourself until you have taken advice on a serious matter.
If you are a US taxpayer living in the Gulf
US citizens and green card holders generally have to file US returns on worldwide income, even when they live abroad and pay no local income tax. That creates some issues that are particular to expatriates:
- Overseas accounts may need to be reported on separate forms in addition to the tax return, such as the FBAR and a statement of foreign financial assets. Penalties for missing these can be high, so ask a professional about thresholds and deadlines.
- Exclusions and credits for foreign earnings exist, but they have conditions, and you normally need to file to claim them.
- If you have missed filings, the IRS has procedures for taxpayers living abroad who want to catch up. A lawyer or a specialist expatriate adviser can tell you whether they apply to you.
- Mail and notices may reach you late. Keep a current address on file and consider a trusted US contact.
Choose someone with real experience of expatriate cases, because general domestic advice can miss reporting duties.
Mistakes to avoid
- Waiting until a deadline has passed.
- Paying a large upfront fee to an unregulated firm.
- Giving the IRS information you have not reviewed.
- Assuming that living abroad ends US filing obligations.
A good adviser costs money, but a well-handled IRS problem often costs far less than one left alone.
Dealzbook publishes general information, not personal advice. Rules and prices change, so check with the relevant authority or a licensed adviser before you act. See our editorial policy, or tell us about a mistake.
