An entrepreneur must wear different hats, and while you may be great at running a business, you might not be as well versed on taxation and tax-related issues. A tax attorney would know how to deal with certain situations.
Here are the instances that require an experienced lawyer:
Federal income tax matters
When you find yourself lost in the maze of ownership of captives and similar entities, it makes sense to hire an 831 (b) attorney. An experienced legal team would be able to show their clients options and alternatives. You want to enjoy legitimate tax savings, but you do not want to get into any trouble with the IRS for sure. Federal income tax matters are often complex and indiscernible to an inexperienced person, so it pays to hire services that would ensure your compliance.
Are you in the process of setting up a new business? Whether you are putting up a sole proprietorship or a corporation, the structure should be based on the advice of a legal consultant. A tax attorney is well versed in taxation, but he or she would be able to give advice on other aspects of your entrepreneurial initiatives.
Perhaps, you are already an established entrepreneur. This year, you have decided to take a leap of faith and test the waters of international business. Tax treatments and contracts should always go through the discerning and informed eyes of a reputable tax lawyer. You will definitely need help, especially when you are dealing with partners and/or clients from other countries.
A tax attorney would also be of great help when you are thinking about selling a business or buying another corporation. How do you maximize capital gains? What can you do to protect your investment from depreciation? A tax specialist would know the answers to these questions.
On IRS matters
Penalties and additional interests could hurt you, especially when you are going through tough times. A tax lawyer would be able to usher you from troubled waters to a calm shore where the IRS is not waiting with shackles. You don’t want any kind of trouble with the IRS, and there is a legally binding audit process where you want the results to have no negative impact on your business.
To avoid huge penalties or a civil lawsuit, you must have a tax lawyer by your side. Any business would suffer when the IRS is on its tail. You want to avoid being on the naughty list of the IRS.
A tax attorney or a CPA
The question of whether a certified public accountant’s point of view is sufficient often comes up. You must realize that the work of a CPA lies on maintaining financial and business records. While they are key to tax preparation and can help in compliance with the tax code, their knowledge and experience do not include the legal aspects of taxation.
Therefore, when there is a need to clarify legal matters surrounding taxes, the IRS, or any specific stipulation in tax law, you must have a reputable tax lawyer on speed dial.