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Can a tax attorney prepare U.S. tax returns?
Yes, a tax attorney is eligible to obtain the authorizations necessary to prepare federal and state tax returns for individuals and entities. These are the same authorizations that other tax professionals, such as accountants (CPAs) and Enrolled Agents (EAs), are required to obtain and maintain.
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What type of tax professional can represent taxpayers in United States Tax Court proceedings or criminal proceedings?
Generally, and subject to limited exceptions, only an attorney can represent taxpayers in U.S. Tax Court proceedings. In addition, legal counsel is needed for representation in connection with criminal proceedings.
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Why is it important to hire an attorney to assist with legal and tax matters?
Attorneys are trained to apply an analytical process with respect to client matters. The process generally consists of: gaining an understanding of a client's particular objectives, facts, and circumstances; applying a legal analysis with respect to the specific facts of the matter; and exercising legal judgment and advising the client accordingly.
This process often requires developing unique approaches and solutions to complex and/or problematic circumstances, while at the same time seeking to limit the risk of potential legal claims.
This process is the result of specialized education, training, and skills that are developed over time and require a commitment to excellence and to the practice and principles of law.
This process cannot be duplicated by do-it-yourself legal websites.
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Why is it important to hire an attorney to assist with contracts and legal documents?
Contracts are very important in the U.S. legal system. Contracts are a complex combination of business and legal terms, and each contract is different. In fact, the documentation for certain transactions often consists of multiple contract and legal documents. Generally speaking, once a contract is entered into, it can only be modified upon mutual written agreement of the parties.
The reality is that the objectives and circumstances that existed at the time a contract is entered into rarely remain the same throughout the term of the contract. In the event of change in circumstances or disagreement, the parties and their legal representatives will carefully scrutinize the contract to determine their respective rights and obligations. In the event that legal proceedings are threatened or commenced, a binding contract will generally carry more evidentiary weight than other types of evidence.
To illustrate the importance of contractual wording, one short, simple word - such as the word "not" - can completely alter the meaning of a given sentence and ultimately of the contract as a whole. Extending this example to tax return preparation, a single incorrect or misplaced number can completely alter the amount of tax liability shown on the return.
Another example is that the title of a contract can be misleading. At first glance, two contracts with the same title may appear similar because they share the same title and similar paragraph headings. However, when reviewed and compared closely, contracts typically contains numerous important differences.
It is also important to note that contracts downloaded from the internet, such as a generic contract template or a contract that has been previously entered into by other parties, will not reflect the unique objectives and circumstances of a client. As a result, these contracts will not be helpful in the event of a change in circumstances or a dispute.
The foregoing explanation illustrates why attention to detail is so important in the law. An attorney will spend considerable time and effort carefully reading and rereading, writing and rewriting, and revising and re-revising legal documents.
Again, do-it-yourself legal services cannot replicate this level of careful attention.
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What is the difference between engaging a large law firm as compared to a solo or small law firm practitioner?
When a client engages a larger firm, the law firm will unilaterally assign the matter to a relatively inexperienced junior level attorney with a billable hours quota.
When a client engages a solo practitioner with many years of experience, the client can rest assured that the solo practitioner is personally attending to their matters, unless otherwise indicated. In addition, a solo practitioner has discretion regarding fees.
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I am a small business owner or am self-employed. Is it sufficient to file annual federal and state income tax returns?
Generally speaking, tax return filing requirements are more onerous and complex for business owners and self-employed individuals than for salaried employees.
Business owners and self-employed individuals who receive compensation from their business activities that exceeds certain minimum threshold amounts are responsible for filing quarterly federal and state employment tax returns and/or making quarterly tax payments.
In addition, U.S. businesses that sell goods to customers located in certain U.S. states must collect state sales tax and file quarterly sales tax returns.
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