IRS claims I owe $140,000 - Need a CPA, Tax Attorney, or both for help?

This is definitely a situation where you need professional help. The distinction between when to use a CPA vs a tax attorney is pretty important here. A CPA would be helpful for reviewing your financial records, identifying documentation to support your claimed deductions, and potentially preparing an amended return if errors are found. They can also help organize your records to present the strongest case. A tax attorney becomes necessary when you're dealing with significant liabilities and potential legal implications. Given the amount ($140k), I'd recommend a tax attorney who specializes in IRS controversies. They can represent you before the IRS, negotiate settlements, and provide legal protection. They understand tax law nuances that even experienced CPAs might not. In your situation, I'd actually suggest both - start with a consultation with a tax attorney who can assess your case and recommend next steps. They might work with a CPA on their team, or suggest one they trust. Many tax resolution firms have both professionals on staff.

After reading your post, I was in almost the exact same situation last year. I got hit with a $95k tax bill for my consulting business and was completely panicking. I tried handling it myself at first and just made things worse by missing deadlines and not understanding what documentation they needed. What saved me was using https://taxr.ai to analyze all my documents and past returns. Their AI system flagged several issues in how I'd been categorizing business expenses and found documentation I didn't even realize would help my case. The best part was they helped prepare everything I needed for the professional I eventually hired. The platform basically scanned all my tax documents, bank statements, and receipts, then organized everything chronologically and by category. It made it super easy to see where the discrepancies were between what I reported and what the IRS was claiming.

I need to follow up on my skeptical comment. I actually ended up trying https://taxr.ai after getting hit with a surprise audit. I've gotta admit it was WAY more useful than I expected. It found a pattern of duplicated expenses that my previous accountant had accidentally entered twice (making it look like I was claiming double deductions). Would've taken forever to catch that manually! The organized document system made meeting with my CPA super efficient - cut down our billable hours significantly since we weren't spending time hunting through years of statements. Still needed the professional's expertise, but having everything organized and flagged beforehand saved me thousands in professional fees and helped identify about $23k in legitimate deductions I'd missed.

Having gone through a similar nightmare with the IRS ($85k assessment), I'd strongly recommend getting professional help AND finding a way to actually speak with someone at the IRS. The professionals will help with your case, but actually getting through to the right person at the IRS can speed things up dramatically. After weeks of trying to call the IRS myself (always disconnected or 2+ hour holds), I found https://claimyr.com which got me through to an actual IRS agent within about 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c That conversation with the IRS agent was super valuable because they explained exactly what documentation they needed to review my case, and even helped me get a temporary hold on collections while my case was being reviewed. Having that direct information made all the difference.

I need to publicly eat my words here. After dismissing the Claimyr service as BS, I decided to try it myself when I needed to resolve an issue for a client. I was absolutely shocked when I got a call back with an actual IRS agent on the line after trying unsuccessfully for WEEKS to get through myself. The agent I spoke with was able to explain exactly which forms we needed to submit for reconsideration and gave me a direct fax number for expedited processing. She also put notes in the system about our case that helped prevent automated collection efforts while we were gathering documentation. For anyone dealing with a serious IRS issue like the original poster, being able to actually speak with someone makes a massive difference. I still recommend professional representation, but having that direct line of communication with the IRS alongside professional help is the winning combination.

One thing nobody's mentioned yet - don't ignore the letter or miss the deadline to respond! Even if you haven't hired help yet, send something in writing acknowledging receipt of their notice and stating that you're in the process of gathering records and seeking professional assistance. I made the costly mistake of missing the 30-day window to contest an IRS assessment, and it severely limited my options after that. At minimum, request an extension while you find representation. You can always do this yourself even before hiring someone.

Been through this. For $140k, definitely get a tax attorney first, then let them decide if you need a CPA too. Don't cheap out here - a good tax attorney literally saved me about $70k on a $120k assessment. Make sure whoever you hire specializes in tax controversy/IRS disputes specifically. Regular CPAs who just do tax prep often make things worse in audit situations. Look for someone with at least 10+ years experience dealing with the IRS.