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If you've got IRS problems, your first thought might be, "I'll just call my CPA." But here's the truth that most people don't realize until it's too late. A CPA and a tax attorney do two completely different jobs. One adds numbers. The other defenders when those numbers get you in trouble. Today, I'll help you understand when you actually need a lawyer to deal with the IRS and when a CPA just won't cut it.

Because the wrong choice can cost you thousands. There is a core difference. That is that CPAs focus on accuracy and attorneys [music] focus on advocacy. We're trained differently. CPAs go to school and they're and they're trained to make sure that the numbers are right. Everything is black and white. Tax attorneys are trained to find arguments within the gray areas of the law. So, in other words, we go to law school to [music] learn advocacy.

A CPA's world is 1 + 1 equals 2. And a tax attorney's job is to find out when 1 + 1 might actually equal 1.5 or maybe even three. Here's another key point. What you tell a CPA can be used against you. what you owe a tax attorney cannot. There's something called attorney client privilege [music] which means that communications between attorney and client are confidential even in criminal tax matters.

CPAs don't have that privilege protection. There's no such thing as [music] a client or accountant client protection. If you tell your CPA that you fudged a few numbers, they can be subpoenaed to testify. If you tell me, I can't legally repeat it. That's the law. Now, I'm going to give you an example, and it's a little bit gruesome. But if you were to tell me that you killed somebody and you buried them in the backyard, I can't say anything about that because that's protected under attorney client privilege.

And that's even if we just do a consultation and you tell me that, you ultimately don't hire me or pay me any money. Now, there is a key distinction here that I want you to understand, and that is that if you say, "Tonight, I'm going to kill somebody and bury them in the backyard, there you're communicating a future crime, and I must report you." But as far as offenses or crimes that have already been committed, I cannot lawfully repeat that or tell anyone, otherwise I can be despar.

So, you see, there's a key distinction right there between CPAs and tax attorneys. And that the CPA, if you were to tell the CPA the equivalent of, "I killed somebody and buried them in the backyard," they would be under an obligation to report you to law enforcement, and they certainly could be subpoenaed to testify. Here's a second key point. CPAs are compliance experts and not negotiators or litigators.

CPAs ensure that returns are filed correctly, but if the IRS challenges them, they often stop at the audit stage. Tax attorneys are trained advocates. We went through the hell, literal hell, of law school, and they taught us how to advocate on behalf of a client. Tax attorneys handle appeals, negotiations, and we can even file cases in tax court, which accountants generally cannot do. When it turns for a math to law, you need somebody who understands both the tax code and how to argue it.

And that's really important because many CPAs that I know can actually cite the tax code, but they don't know how to be persuasive and convince the IRS that their position or their client's position is correct. Now, I cannot tell you how many times that people have come into me and they had trusted their CPA to handle an IRS problem case and the CPA just dropped the ball.

I'll give you an example. Very often a taxpayer will come in and bring what's called a notice of deficiency into the office. A notice of deficiency is sometimes called a 90-day letter. And it's called a 90 day letter because the IRS gives the taxpayer 90 days to file a tax court petition to dispute whatever assessment, whatever addition to tax that the IRS is attempting to impose upon this particular taxpayer.

And many many times a CPA will write some [music] confusing letter that's hard to understand and they'll send it to the IRS in lie of filing tax court petition. And I used to ask myself, I wonder why they didn't just advise the taxpayer to file a tax court petition. And I think the answer is because the accountant realizes that they're not able to file a tax court petition and that's why they handled it the way that they did.

Now, it's important to know that the tax court petition the 90 days is really it's really one of the very few rules in the tax code where we cannot get an extension for the 90 days. If you blow the 90 days, you blew the 90 days. So, when you call a tax attorney versus just trying to let your CPA handle the situation, and I would say that's when you get a notice or letter from the IRS seeking to either have you clarify your position or seeking to assess additional tax.

And if your CPA doesn't seem confident or sometimes even interested in helping you resolve that matter, I think that you should then consider calling a tax attorney. I also would say if you owe between, you know, 50 50 or $100,000 or more on multiple years of back taxes, it's probably a good idea to consult a tax attorney because in theory, there is the risk of a criminal tax investigation because the statute of limitations criminally for the crime of failure to file a tax return is 6 years.

And so, [music] we want to make sure that you have legal representation should you need it. If your CPA tells you, "Hey, you might need a lawyer for this," probably time to not have the CPA handle it, try and find a a tax attorney. Also, if your tax attorney has a background in criminal defense law, as I do, it's probably a good idea uh to retain such a person.

And I'll tell you, there's a couple reasons. One, there is a slim chance that your case could be turned into a criminal tax case. But I think perhaps more importantly is that when I used to handle criminal defense cases, especially when I handled them at high volume, things would go wrong all the time because your clients wouldn't know to tell you things or they would downplay the status, you know, how bad their criminal record was and things like that.

And then the state attorney, the district attorney in other states would pull out the, you know, pull out the criminal record and they pull a piece of paper up and it would fall to the ground and that's how long their criminal record was. You know, and this is after your client had told you that they had no criminal record. [music] So things would go badly and you had to just stand there as a criminal defense attorney and act non plus and be ready and just know that you had a few seconds to determine what you were going going to say and what you were going to say had to be effective in order to save this, you know, to save the day.

In comparison, tax law is just not nearly as that high stakes. It's not nearly as that fast moving. But those skills learned in that practice area are very helpful in this practice area. Here's a third key point. Business owners are often in the perfect storm of risk because they have disorganized books and multiple years and then they sometimes have cash flow problem. My average client as a business owner who's great at what they do but terrible at keeping up with the IRS.

And you know this is something that it's not shameful. It's just a situation. It's just a fact pattern. It's very easy to fall behind on your bookkeeping or your tax filings. And I think it's important that the person that you hire understands your situation and doesn't try to use shame or negativity in order to close your sale or to get you to hire them. That's not what we do here at all.

I understand how business owners can fall behind in their taxes. I'm not ashamed to admit that I in the past have fallen behind on my taxes. And it's just one of those [music] situations. You just have to get it caught up, prepare, and file returns. And then we just have to figure it out. So, if you're dealing with IRS problems, the difference between hiring a CPA and hiring a tax attorney isn't really about titles.

It's about protection strategy and how far you're willing to go to fix the problem. When the IRS starts coming after you, you need someone who can actually fight back. And if you want to see just how complicated that fight can be, I've put together something called the IRS Battle Guide. It walks you through the exact steps of trying to handle these issues on your own and why most people realize halfway through it that it's just not worth the risk.

You can download it for free using the link below.