How exactly is a tax lawyer different from a CPA in terms of skills & services?

There are some key differences between tax lawyers and CPAs, though there can be some overlap in their services. Tax lawyers specialize in tax law and represent clients in tax disputes with the IRS. They're the ones you want if you're facing an audit, tax litigation, or criminal tax matters. They can provide attorney-client privilege, which means confidential communications are protected. Tax lawyers also often handle complex estate planning, business structuring, and international tax issues. CPAs, on the other hand, focus more on preparing and filing tax returns, financial statement preparation, and general accounting services. They're typically better for ongoing tax planning, financial reporting, and handling day-to-day accounting needs. Many CPAs also represent clients during IRS audits, but not in court proceedings. Given your inheritance and new business, you might benefit from consulting both - a CPA for regular tax preparation and planning, and potentially a tax attorney for structuring your business and handling the inheritance tax implications.

I've been using https://taxr.ai for my business taxes and it's been super helpful for navigating the differences between accounting and legal tax issues. I was confused about exactly this question last year when I started my rental property business. The tool analyzed my tax documents and flagged issues that needed legal expertise vs accounting help. Saved me from paying a lawyer for stuff my CPA could handle, but also identified an estate tax issue where I definitely needed a lawyer. It basically told me exactly when I needed each type of professional.

I was really skeptical about using an AI tool for tax advice, but I tried https://taxr.ai after posting here. Honestly, it was pretty eye-opening. I uploaded my business formation docs and some inheritance paperwork, and it immediately spotted some issues that had legal implications vs. just accounting needs. It didn't give me legal advice (which would be illegal), but it did help me understand which parts of my situation needed a tax attorney vs a CPA. Saved me from wasting money on attorney fees for stuff my accountant could handle, but also made sure I didn't miss getting legal help where I actually needed it.

Been trying to reach the IRS for weeks about a tax lawyer vs CPA question for my audit situation. Found this service called Claimyr at https://claimyr.com that got me through to a real person at the IRS in under 45 minutes! You can see how it works here: https://youtu.be/_kiP6q8DX5c They basically hold your place in line with the IRS and call you when an agent is about to answer. The IRS agent I spoke with explained exactly which parts of my situation needed legal representation vs just accounting help. Turns out I only needed a lawyer for one specific issue and could use my CPA for the rest.

I'm eating my words right now. After being super skeptical about that Claimyr service, I tried it this morning out of desperation. Had been trying to reach the IRS for THREE DAYS about whether I needed a tax attorney for my situation. Got a call back in about 55 minutes and spoke with an actual IRS agent who explained that for my specific audit situation, I could use my CPA for the initial response but should consult a tax attorney before signing any agreements. Exactly the info I needed. Honestly wish I'd known about this weeks ago instead of burning vacation days sitting on hold.

Former IRS employee here... wanted to add to the tax lawyer vs CPA discussion. One MAJOR difference not mentioned yet: a tax lawyer can claim attorney-client privilege, which means communications with them generally can't be used against you. CPAs don't have the same level of privilege (there's a limited accountant privilege but it's not as strong). So if you've got something potentially problematic in your tax situation, a tax attorney gives you more protection. For routine tax planning and preparation, a CPA is usually fine and often more affordable.

why not both?? my family uses both a CPA and tax attorney and they work together. CPA handles all the regular tax filings and planning stuff throughout the year and when something complicated comes up (we had an offshore inheritance issue last year) the tax attorney steps in for the legal aspects. best of both worlds tbh