If you or your business is facing complicated tax issues, you probably know about two of your options for professional assistance.
You can hire a tax attorney or a certified public accountant (CPA).
A third, lesser known option is to hire an enrolled agent.
Which type of professional you choose depends largely on your specific needs.
When dealing with arbitration or any matters that will be resolved in the courts, tax attorneys are the obvious and sometimes the only choice.
While you may find tax attorneys willing to handle other aspects of your tax situation, you should know that attorneys - while experts in legal matters - may not be efficient or up-to-date concerning tax issues outside the court system.
You may find yourself paying exorbitant hourly rates for work that would be better handled by a CPA or enrolled agent.
CPAs maintain their credentials with continuing education programs that keep them current on the latest changes in IRS forms and procedures.
Working with a CPA as you plan your finances could prevent you from ever needing the services of a tax attorney.
They are also adept with IRS audits.
Anyone who has experienced an audit knows how confusing, complicated and frustrating they can be - and how expensive they can become if not dealt with properly.
If you're being audited, a CPA is probably your best option for professional representation.
However, if you are undergoing negotiations with the IRS or trying to resolve a tax issue without taking it to court, it may be that neither a tax attorney nor a CPA will be of maximum benefit.
Their education and training do not necessarily give them an in-depth understanding of how to deal with the IRS outside of the formalities of a courtroom or an audit situation.
This is where enrolled agents come in.
There are two types of enrolled agents: those who have worked for the IRS for a minimum of five years in a position that involved regulation and enforcement, and those who have taken a thorough examination on all aspects of the US tax code.
Basically, an enrolled agent is someone who knows the IRS inside and out.
In order to maintain their credentials, enrolled agents - like CPAs - must keep up-to-date with continuing education programs.
They can appear before the IRS to represent individuals or businesses.
And because they deal with ongoing, day-to-day issues, they often charge a fixed rate instead of by the hour, which is how tax attorneys and CPAs generally do their billing.
Moreover, enrolled agents are licensed by the federal government, whereas CPAs and tax attorneys are licensed by the state in which they practice.
Individuals or businesses with tax issues in more than one state can consolidate their representation with an enrolled agent instead of hiring different CPAs or attorneys for each state.
Review your particular needs carefully when choosing which type of representation is best for you.
But be sure to look closely at the advantages of the often-neglected enrolled agent.
You can hire a tax attorney or a certified public accountant (CPA).
A third, lesser known option is to hire an enrolled agent.
Which type of professional you choose depends largely on your specific needs.
When dealing with arbitration or any matters that will be resolved in the courts, tax attorneys are the obvious and sometimes the only choice.
While you may find tax attorneys willing to handle other aspects of your tax situation, you should know that attorneys - while experts in legal matters - may not be efficient or up-to-date concerning tax issues outside the court system.
You may find yourself paying exorbitant hourly rates for work that would be better handled by a CPA or enrolled agent.
CPAs maintain their credentials with continuing education programs that keep them current on the latest changes in IRS forms and procedures.
Working with a CPA as you plan your finances could prevent you from ever needing the services of a tax attorney.
They are also adept with IRS audits.
Anyone who has experienced an audit knows how confusing, complicated and frustrating they can be - and how expensive they can become if not dealt with properly.
If you're being audited, a CPA is probably your best option for professional representation.
However, if you are undergoing negotiations with the IRS or trying to resolve a tax issue without taking it to court, it may be that neither a tax attorney nor a CPA will be of maximum benefit.
Their education and training do not necessarily give them an in-depth understanding of how to deal with the IRS outside of the formalities of a courtroom or an audit situation.
This is where enrolled agents come in.
There are two types of enrolled agents: those who have worked for the IRS for a minimum of five years in a position that involved regulation and enforcement, and those who have taken a thorough examination on all aspects of the US tax code.
Basically, an enrolled agent is someone who knows the IRS inside and out.
In order to maintain their credentials, enrolled agents - like CPAs - must keep up-to-date with continuing education programs.
They can appear before the IRS to represent individuals or businesses.
And because they deal with ongoing, day-to-day issues, they often charge a fixed rate instead of by the hour, which is how tax attorneys and CPAs generally do their billing.
Moreover, enrolled agents are licensed by the federal government, whereas CPAs and tax attorneys are licensed by the state in which they practice.
Individuals or businesses with tax issues in more than one state can consolidate their representation with an enrolled agent instead of hiring different CPAs or attorneys for each state.
Review your particular needs carefully when choosing which type of representation is best for you.
But be sure to look closely at the advantages of the often-neglected enrolled agent.