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When Do I Need a Tax Attorney?

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Question: When Do I Need a Tax Attorney?
What can a tax attorney do for my small business? When should I call a tax attorney?
Answer:

What is a Tax Attorney
A tax attorney is, first of all, an attorney. That is, he or she has a Juris Doctor (J.D.) degree and has passed the bar exam, qualifying this person to practice law in one or more states. The tax specialization is developed over time and experience by certain attorneys. Tax attorneys keep up with the many frequent changes in the tax law to help you with tax questions.

When is a Tax Attorney Needed
Some businesses keep a tax attorney on retainer, because there are many situations when a business might need a tax attorney. For example:

  • At business start-up, a tax attorney reviews the various legal types of business to determine which might be best for that business.
  • A tax attorney reviews business contracts and negotiations, such as those for purchase or sale of a business, to determine the tax effects of these deals.
  • A tax attorney can advise on treatment of sales and expenses and deductions (depreciation, for example) for the most advantageous tax treatment.
  • A CPA can represent you in an audit, as can a tax attorney, but only the attorney can represent you in a tax court situation.
  • In business bankruptcy, a tax attorney can help determine the best bankruptcy form and can advise you on the potential tax effects of various actions during and after the bankruptcy.

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