7 Reasons You Need A Tax Attorney in 2018
Should you hire a Los Angeles tax attorney this year?
The structure of our tax laws is changing in 2018, which means it’s more important than ever that you file your taxes carefully.
Tax laws are complicated and even the slightest mistake can cost you a lot of time and money. If the IRS encounters a problem with your taxes, you may be audited. In this event, it’s best to hire a tax attorney immediately in an effort to resolve the problem quickly and efficiently.
Should you hire a tax attorney earlier?
Today, we’re taking a closer look at some of the most common reasons to hire a tax attorney in 2018.
1. You Forgot to File a Return
It’s important you file your tax return on time.
Failing to do so will result in several penalties for filing late and paying late.
If it happens more than once, it would be even more important to have an attorney. The IRS is going to want answers, and an attorney can help you with those and explain any circumstances that may alleviate the severity of the offense.
If you owe back taxes or have other IRS liabilities, an attorney can help you with an Offer in Compromise that requests the IRS to accept less than what you owe in taxes and interest. It also stops collection efforts and prohibits IRS levies against any of your assets or wages.
2. You Receive a CP Notice
The government often sends out CP notices to tell you there is some discrepancy with your tax filing.
There can be many reasons for this. In some cases, you may need to pay additional taxes, but in other cases, you may be entitled to receive a refund you didn’t know about.
If you have questions about these notices, an attorney can explain them to you and help you with correct reporting of income and with any needed resolution. You may get a notice that the IRS could not process your return due to a wrong Social Security Number or other incorrect information.
You may get a notice of changed tax responsibility because of a grant you received for a hurricane loss or for a first-time home purchase.
You may be eligible for a tax deferment because you or a spouse served in a combat zone or hazardous duty station.
You may get a notice that the IRS is simply reviewing your returns or is asking for more information.
So, when you get a CP notice, there is no reason to panic. But a tax attorney can always advise you of the tax implications of the many situations you may experience in life.
3. You Get an Audit
Being audited by the IRS for possible legal matters involving your taxes is a stressful experience. The punishment for making mistakes can be severe, resulting in fines, leans, and even jail time.
If you are audited, you may find an endless stream of questions flowing through your mind.
Will I get in legal trouble with the IRS?
Will I face fines or possible jail?
What can I do?
It’s important to know your legal options, as well as your legal rights. Similar to going to court on a civil issue, having an attorney is a good idea on tax auditing as well.
An attorney can help you with the audit process in a number of ways. In the case of penalties, your attorney can file for penalty abatement. She can make an offer on your behalf to compromise on your tax debt. Or she can ask that you be given the option of installment payments.
Having an attorney represent your interests will make sure you get the best outcome with the IRS.
4. You Are Being Charged with a Crime
Unless you don’t mind going to jail, having an attorney is an absolute necessity if you are being charged with a crime. If you have evaded tax payments, withheld income on your returns, or committed fraud, the IRS may investigate you for criminal prosecution.
The penalties for tax evasion can be quite serious, and punishments can be heavy.
Payment of back taxes and fines are one avenue or restitution. But the threat of jail or prison time is also there. A tax attorney can help to defend you, possibly explain extenuating circumstances, if any, and hopefully work out reasonable solutions in lieu of imprisonment.
Criminal cases of any kind warrant the involvement of a qualified criminal defense attorney.
5. You Want to Take Care of Inheritance or Estate Issues
Inheritances and estate distributions may be subject to taxes.
If someone leaves you an inheritance upon their death, your state may require an inheritance tax. We hear from a lot of Californians who wonder … does California have an inheritance tax?
If an estate is to be bequeathed to heirs, it may be advisable for the taxes to be prepaid, and an attorney can help with that. This will lessen the chance of the IRS pursuing the heirs for tax payments.
Many people may not know that inheritance is taxable, and not paying the taxes on any sizeable amount of inheritance can lead to IRS consequences. If you inherit money, an attorney can help guide you through the legal process of filing your taxes properly.
6. You are Starting a Business
There are several tax implications in starting a new business or merger.
You have to decide what kind of business it will be.
You may want to be a sole proprietor.
You may want to incorporate.
You may want it to be a Limited Liability Corporation (LLC).
Different legal structures have different tax structures.
Having the right tax arrangements can protect your business investment and keep you out of legal trouble. A tax attorney will make sure you set up your business correctly. It is even more important if you are starting an international business and/or if you foresee entering into many contracts as part of the business.
7. You Just Need to Talk to the IRS
Like many government agencies, the IRS uses many forms and has a language all its own.
It can be difficult to communicate with the agency if you are not familiar with its processes and structure.
You don’t want to jeopardize your relationship or make matters worse by misunderstanding what the IRS is looking for or how it operates. And 2018 has some new challenges you may not understand fully.
You can always hire an attorney to speak for you and act as a liaison on your behalf.
Your attorney can make phone calls for you, send letters or emails, and respond to requests for information. She can also explain any communications from the agency to you. In almost any IRS situation, but especially this year, it may be better to be represented by a qualified, certified tax attorney.
Conclusion
Between tax law complexities and tax law reform of 2018, it’s beneficial to seek the help of a professional when in doubt.
Hiring a Los Angeles tax attorney will help protect your interests as you navigate the process of filing your tax return, complying with an IRS audit, or resolving a problem involving a legal matter. Due to the sensitivity of legal matters involving taxes, it’s best to lean on the help of someone with experience.
If you need help finding a tax attorney in Los Angeles, give us a call at 818-697-0604.
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Thanks for explaining why it could be good to have a tax attorney. I didn’t know that they could actually help your business investment by having the right arrangements in place. I’m kind of interested to learn if the arrangements that an attorney puts in place could depend on the kind of business you may have.
Hi Taylor,
If you’d like, we could set up a free consultation with an attorney. Give us a call or complete the attorney request form to get started.
I never thought about the benefits of getting a tax lawyer if you are getting an inheritance, and had no idea that inheritance is taxable. A good friend of mine is getting an inheritance and doesn’t know what she needs to do. I will definitely share this information with her!
Thanks for reading, Brooklyn!