I've used both over the years. My CPA handles my normal taxes, business filings, and helps with planning. Only needed a tax attorney once when I got hit with an incorrect $42k IRS bill for unreported income (was actually my ex-wife's but they came after me). Attorney cost more but had the expertise for that specific legal situation. If you're just trying to get your taxes done right and plan properly, start with a CPA. If the IRS is threatening liens, levies, or criminal charges, then you need an attorney. A good CPA will tell you when it's time to bring in legal help.

Having dealt with both CPAs and tax attorneys, I'd recommend starting with a CPA for your situation. Small business and rental income complications are exactly what CPAs handle daily - they'll help you structure your deductions properly and identify any potential audit red flags before they become problems. The key is finding a CPA who specializes in small business taxation rather than just individual returns. They can set up proper bookkeeping systems, advise on business structure (LLC vs S-Corp, etc.), and handle the rental property depreciation correctly. This proactive approach often prevents the issues that would require a tax attorney later. Tax attorneys are definitely worth their fees when you're facing IRS enforcement actions, potential criminal issues, or complex estate/trust matters. But for maximizing deductions and staying compliant with business/rental income, a good CPA will save you money and keep you out of trouble. If problems do arise later, your CPA can work with a tax attorney as needed.

Does anyone know if the rules are different for residential rental property vs commercial? I have both and it seems like there might be different thresholds or rules for each type.

Great discussion here! I'm dealing with a similar situation but with a twist - I have a duplex where I live in one unit and rent out the other. How does the personal vs business use percentage affect these decisions? If I do a $2,000 improvement that benefits both units equally, can I still use the de minimis safe harbor for the 50% business portion? Or does the mixed-use nature of the property complicate things? I've been going back and forth on whether to expense what I can immediately or add everything to basis for when I eventually move out and rent both units. Also wondering if anyone has experience with how this plays out when you convert a personal residence to rental property - do prior improvements suddenly become depreciable at that point?

Did you have any credits like EIC or CTC? Those usually take longer to process and get more scrutiny.

EIC claims definitely get extra scrutiny and can add weeks to processing time. The good news is once you see those 571/290/971 codes, it usually means they've finished their review and you're in the final stages. Based on your transcript showing movement on 12-10-2024 with the 570 code still there, I'd expect to see an 846 code (refund issued) within the next 1-2 weeks. The -$42 balance is actually your refund amount after interest calculations. Keep checking your transcript updates on Thursdays/Fridays - that's when they typically post new cycles.

Just wondering what software your preparer used? I'm asking because some tax software won't even let you e-file as a paid preparer without entering a valid PTIN. So either they're paper filing (which is unusual these days), using consumer software and pretending they're not a paid preparer, or somehow bypassing verification systems.

This is actually a really important question that @Freya Andersen raised. When I had my returns done, they were definitely e-filed - I got the electronic confirmation and everything. But now that you mention it, I never really paid attention to what software they were using or how the process worked on their end. If the software requires a valid PTIN to e-file as a paid preparer, then either they somehow got around that requirement or they're filing under someone else's PTIN. Both scenarios are pretty concerning and suggest this might be more serious than just forgetting to renew their registration. I'm definitely going to ask them directly about this when I confront them about the PTIN issue. The fact that they've been able to e-file for years without a valid PTIN suggests there might be some deliberate deception going on rather than just an oversight.

I went through this exact same frustration last year! Your former employer is definitely confusing the processes. The W-4R is for taxable distributions, but a direct rollover isn't a distribution to you - it's a transfer between qualified plans. Here's what finally worked for me: I called my NEW 401k provider first and asked them to initiate the rollover from their end. They sent me their "incoming rollover" forms and handled all the communication with my old plan administrator. This completely bypassed my former employer's HR department, who honestly didn't seem to understand the difference between direct and indirect rollovers. The key phrase you want to use is "trustee-to-trustee transfer" - this is the technical term that plan administrators understand. Also, make sure you have your new plan's acceptance letter or documentation showing they'll accept the rollover. If you're still getting pushback, you can reference IRS Code Section 401(a)(31), which specifically gives participants the right to elect direct rollovers. Good luck!

I'm dealing with almost the exact same situation right now! My former employer's HR department keeps insisting I need to fill out tax withholding forms even though I've explicitly requested a direct rollover multiple times. What's been particularly frustrating is that they seem to think ANY money leaving the plan requires tax withholding, which shows they don't understand that direct rollovers are specifically exempt from the 20% mandatory withholding rule. I'm definitely going to try the approach of having my new 401k provider initiate the transfer - that sounds like it could bypass a lot of this confusion. Has anyone had success getting their former employer to admit they were wrong about requiring the W-4R, or do they usually just quietly process it correctly once you go through the right channels? Thanks for all the helpful suggestions in this thread - it's reassuring to know this is a common problem and not just my former company being difficult!