Should I use a CPA or tax attorney to defend against my tax audit?
If you are facing an audit by the IRS or a state entity, you need the assistance of a qualified advocate. The IRS will allow representation by a Certified Public Accountant (CPA), tax attorney, or an Enrolled Agent (EA). Hiring a professional to represent you in an audit can prove vital in protecting your legal rights. Your advocate will ensure you provide only the information strictly necessary to comply with the audit, and will be in your corner working to minimize or eliminate tax liabilities. While a CPA or EA may be allowed to represent you, there are several crucial benefits to using a tax attorney to defend against your IRS or state audit.
Attorneys are trained to be legal advocates for their clients, a skill not similarly found in the education of CPAs or EAs. Your attorney will strongly advocate for your best interests and will know what actions best to take when issues arise in your defense. Additionally, an attorney alone will have the power to litigate in any court, if necessary. Whereas a CPA or EA is limited to defending you against the IRS audit, your attorney can bring the matter to federal or state court if it is necessary in pursuit of your best defense.
Perhaps the most common reason for those facing an audit to consider a CPA over an attorney is concern over costs. There is a misconception that hiring an attorney will automatically mean more expense than retaining the help of a CPA. In fact, many tax attorneys offer rates comparable to CPAs for audit defense, allowing you to pay the same rate for a trusted legal advocate.
Your relationship with your attorney comes with a unique benefit not shared by CPAs or EAs. Your communications with your attorney are strictly protected by the attorney-client privilege. CPAs have only a limited privilege which applies to federal and state tax matters. If your CPA is subpoenaed to testify against you in an IRS court case, he or she could divulge protected information. Your attorney could not be forced to give like information under the attorney-client privilege.
An audit is a stressful and frightening experience, but with the assistance of an experienced tax attorney you can aggressively defend against underpayment allegations to achieve the best possible outcome. Contact a tax attorney for help with your audit defense today.