When to Consult a Tax Attorney for Your Business

For most small businesses, hiring a bookkeeper or accountant covers the majority of tax-related needs. But there are certain situations where a tax attorney’s expertise becomes essential. Unlike CPAs or enrolled agents, tax attorneys are legal professionals who specialize in the intersection of business operations and tax law—especially when things get complicated.

In this post, we’ll explore when to consult a tax attorney for your business, how their role differs from other financial professionals, and the scenarios where their legal expertise can protect your business, save you money, and help you make smart, compliant decisions.

What Is a Tax Attorney?

A tax attorney is a licensed lawyer who specializes in the complexities of tax law. They’re qualified to:

• Interpret federal and state tax codes

• Represent clients before the IRS and in court

• Structure business entities for tax efficiency

• Handle tax disputes, audits, and settlements

• Provide legal protection through the attorney-client privilege

While CPAs handle financial reporting and tax prep, tax attorneys focus on legal tax issues and defense.

When to Consult a Tax Attorney

Not every business needs ongoing legal tax advice, but certain moments require a tax attorney’s insight. Here are the most common times to bring one in:

✅ 1. You’re Facing an IRS Audit or Investigation

If you receive notice of an audit, or worse—an IRS criminal investigation—it’s time to consult a tax attorney.

They can:

• Represent you during the audit process

• Communicate directly with the IRS on your behalf

• Advise you on how to respond to document requests

• Protect you from self-incrimination or accidental disclosures

• Negotiate payment plans or settlements

💡 Why it matters: Audits can escalate quickly. A tax attorney helps ensure compliance while protecting your legal rights.

✅ 2. You Owe Back Taxes or Have Tax Debt

If your business owes significant back taxes, has accrued penalties, or is struggling with tax liens or levies, a tax attorney can help you:

• Apply for an Offer in Compromise (OIC)

• Negotiate installment agreements

• Request penalty abatement

• Avoid wage garnishment or asset seizure

• Resolve tax liens and levies

💡 Pro Tip: CPAs may assist with payment plans, but a tax attorney can negotiate legally binding agreements and represent you in court if needed.

✅ 3. You’re Involved in a Business Legal Dispute

Tax issues often arise during:

• Lawsuits

• Mergers and acquisitions

• Bankruptcy filings

• Business dissolutions

• Partner disputes

A tax attorney ensures that your legal strategy also accounts for tax liabilities, which can significantly affect the outcome of the case.

✅ 4. You’re Structuring or Restructuring Your Business

The legal structure of your business—LLC, S Corporation, C Corporation, partnership—directly impacts your tax obligations.

A tax attorney can:

• Analyze the tax implications of each entity type

• Help with restructuring to lower your tax burden

• Ensure multi-state or international compliance

• Draft or review partnership agreements, bylaws, or shareholder contracts

💡 Why this helps: Misclassification or poor structure can result in higher taxes and increased legal exposure.

✅ 5. You’re Expanding Into New States or Countries

If you’re doing business across state lines or internationally, tax laws become significantly more complex.

A tax attorney can help you:

• Navigate state income tax nexus rules

• Comply with sales tax obligations in multiple jurisdictions

• Understand international tax treaties

• Structure foreign operations to reduce double taxation

💡 Risk Alert: Each state has unique requirements—failing to file properly could lead to audits or back taxes.

✅ 6. You’re Undergoing a Complex Transaction

Some transactions trigger tax consequences that require legal planning:

• Selling your business or major assets

• Transferring ownership

• Inheriting or gifting business shares

• Real estate transactions tied to the business

• Creating a holding company or trust

A tax attorney ensures these events are structured in a way that’s legal, tax-efficient, and documented properly.

✅ 7. You Suspect Tax Fraud or Want to Correct Past Mistakes

If you or a previous accountant made errors—or you’ve discovered potential fraud—consulting a tax attorney is vital.

They can:

• Help you file amended returns

• Advise on voluntary disclosure programs

• Represent you if there’s risk of criminal investigation

• Maintain confidentiality under attorney-client privilege

💡 Important: Only attorneys—not CPAs—offer full legal confidentiality protection.

How a Tax Attorney Works With Your Bookkeeper or CPA

You don’t have to choose one over the other. In fact, the best approach is a team effort:

• Your bookkeeper maintains daily financial records

• Your CPA prepares taxes and provides financial guidance

• Your tax attorney handles legal tax issues and high-risk situations

This trio ensures complete financial and legal support, especially during growth or challenging transitions.

Signs It’s Time to Call a Tax Attorney

• You’ve received a certified letter from the IRS

• You owe more than $10,000 in back taxes

• You’re considering a business sale, merger, or expansion

• You’re unsure about your business entity structure

• You need help with multi-state or international taxes

• You’ve made significant reporting errors or omissions

How to Choose the Right Tax Attorney

When selecting a tax attorney for your business, look for:

• Experience with business tax law and IRS representation

• Strong reviews or referrals from financial professionals

• Transparent pricing and scope of services

• A willingness to collaborate with your existing CPA or bookkeeper

Conclusion

For most routine tax tasks, a skilled CPA or bookkeeper will get the job done. But when legal complexity enters the picture—from audits to expansions, from tax debt to restructuring—a tax attorney is a smart investment.

They offer the legal protection, strategic insight, and compliance support your business needs to avoid pitfalls and grow with confidence.

Need help getting your books audit-ready or preparing for a consultation with a tax attorney? TA Bookkeeping provides expert bookkeeping services tailored to meet the needs of small businesses. Fill out the form below to get started.