(888) 913-9745 Need Assistance With Your Tax Issues Quickly?

Here you can edit the background of the section

Powell Tax Law Blog

4 min read
elderly woman speaking with a tax attorney

Understanding the Difference Between a Tax Attorney and a CPA

Certified public accountants (CPAs) and tax attorneys are professionals who can help you with tax-related services and financial planning, but while they are similar, they have different areas of expertise and training.

“Certified public accountants (CPAs) and tax attorneys are both uniquely qualified and trained professionals that can help you with taxes and financial decisions,” says Intuit. “Deciding which to hire depends upon your particular set of circumstances and the type of assistance you need.”

In a nutshell, WallStreetMojo breaks down the CPA vs. Tax Attorney hiring question as follows:

  • Need to handle financial aspects of tax-related matters or create a long-term tax plan? Hire a CPA.

  • Facing a legal battle with the Internal Revenue Service (IRS), or need a professional to defend yourself in court? Hire a tax attorney.

“CPAs have one big limitation – they are ill-equipped for litigation,” writes Stephen J. Dunn, adjunct lecturer at the University of Michigan-Dearborn College of Business. “A taxpayer should always be represented by an attorney if the case involves a potential criminal offense, such as tax evasion, filing a willfully false tax return, or failure to file a tax return that is due.”

Tale of the Tape: CPA vs. Tax Attorney

WallStreetMojo has an infographic that illustrates some basic differences between a CPA and a tax attorney:

  • Definition

o   CPA: A state-board licensed accounting professional specializing in business, finance, and taxation.


o   Tax Attorney: A lawyer specializing in tax rules and regulations.


  • Career Opportunities

o   CPA: Business consultant, financial advisor, accountant, CFO, and auditor.


o   Tax Attorney: Solo practitioner, corporate legal advisor, tax attorney at a law firm or for the government, estate planning attorney, and litigation attorney.


  • Education

o   CPA: Varies by the state board of accountancy but typically must pass all four parts of the Uniform CPA Exam within an 18-month period plus at least 150 college credits (that is usually 30 more hours than a normal bachelor’s degree) plus work experience (often 1,800 hours under the supervision of a licensed CPA).


o   Tax Attorney: Law degree plus a passing certificate of the state bar association exam.


  • Skills Required

o   CPA: Mathematical and accounting, high ethical standards, attention to detail, client focus, extensive business perspective, and research, analytical, and problem-solving skills.


o   Tax Attorney: Factual and legal research, attention to detail, mathematical and accounting, effective written and oral communication, and strong analytical reasoning.


  • Tax Specialization

o   CPA: Financial accounting, bookkeeping, auditing, tax preparation, and tax planning.


o   Tax Attorney: Resolve legal disputes or controversies related to tax.


  • IRS Disputes

o   CPA: Represents the taxpayer before the IRS but lacks required legal expertise.


o   Tax Attorney: Represents the taxpayer before the IRS and defends him or her as well.


  • U.S. Courts of Law

o   CPA: Cannot represent the taxpayer in the Tax Court as the license is retracted to the issuing state in most cases.


o   Tax Attorney: Can represent the taxpayer in the Tax Court.

8 Reasons to Hire a Tax Attorney

When you have a problem or issues, do you call a tax attorney or a CPA? Here are 11 reasons you would dial a tax attorney:

  1. IRS Audit: Out of 160 million individual income tax returns that were filed in 2021, the IRS audited 659,003, or just 4 out of every 1,000 returns filed. Most of these audits are correspondence audits, which shouldn’t be confusing, and often require the intervention of a tax professional to resolve. 100,000 cases are in-person audits, and in these cases hiring a seasoned tax attorney with experience in in-person audits makes sense.

  2. Wage Garnishment: There is nothing worse than to get your paycheck and see a big chunk of your hard-earned income going to the IRS which has garnished your wages because of a tax issue. A tax attorney can examine your situation and see if there are options to get the garnishment lifted. A tax attorney can also help protect your other assets, such as bank and savings accounts, which the IRS can also seize.

  3. Back Taxes: It can be a sinking feeling to owe back taxes, especially if you owe for several years. A tax lawyer can help you realistically assess your situation and help you work out a payment plan if necessary. A tax attorney can also help you apply for a waiver of penalties if the situation warrants.

  4. File a Claim in Federal Court: Taxpayers often end up fighting their case in U.S. Tax Court or Federal District Court and tax attorneys are licensed to represent you and practice before these legal proceedings.

  5. Amended Tax Returns: A tax attorney can help you amend a personal (1040), corporate/business (1120), and employment (941/940) tax return while understanding the time limits, procedures, and process for successfully completing an amended tax return.

  6. Penalty Abatement: Individual taxpayers and business owners can qualify for penalty abatement if they have a good excuse or reason as to why they were unable to comply with IRS rules. A tax attorney can help you properly argue your plea for a penalty abatement.

  7. Installment Agreement: A tax lawyer can help you negotiate an installment agreement with the IRS that is fair and reasonable.

  8. Innocent Spouse Relief: A wife or husband can be relieved of responsibility for paying tax, interest, and penalties if your spouse (or former spouse) improperly reported items or omitted items on your tax return. A tax attorney understands the laws and rules regarding this situation and can help file a claim.

8 Reasons to Hire a CPA

When you have a problem or issues, do you call a tax attorney or a CPA? Here are 10 reasons, according to the Houston Business Journal, you would dial a CPA:

  1. You Want a Licensed Financial Professional: CPAs are incensed by the state to ensure not only competency on financial issues but they should also be up-to-date on issues such as state and federal regulations.

  2. You Need a Professional Accounting System Set-up: CPAs have the knowledge and skills to apply the latest innovations in technology designed specifically for accounting, such as software that enables quick statements and reports, new filing processes, as well as providing quick and easy access to your financial information.

  3. You Need In-Depth Financial Insight into Your Finances: CPA can monitor your total business assets, including the complete ledger balance and its detailed credits, debits, profits, and losses.

  4. You Need Full Financial Statements for Investors, Creditors, or Bank: CPAs can prepare complete financial statements that adhere to accepted accounting standards.

  5. You Need a Greater Understanding of Your Financial Statements: CPAs act as advisors and can review key financial reports to help you make important decisions.

  6. You Need to Ensure Your Taxes are Filed Properly: CPAs can review your tax information and verify IRS and other compliance for you. They can also advise on tax planning opportunities to help minimize tax liability.

  7. You Want to Properly Pay Your Payroll Taxes: If you have a payroll to manage, a CPA can help make sure your payroll taxes are properly paid.

  8. You Need a Business Advisor: CPAs can help a business grow by appraising future projects with profitability, gain, and loss forecasts. They can also help with business proposals.

It is not always an either/or situation as some individuals and businesses rely on the advice of both CPAs and tax attorneys.

While a CPA is a financial expert who can help you with your tax returns, a tax attorney is a legal expert who can help you with tax planning, compliance, and disputes.

These two professionals may work together in some cases, with the CPA providing the financial analysis and the tax attorney providing legal advice.