Do I Need a CPA or a Tax Attorney?

Certified Public Accountants (CPAs) and tax attorneys play vital roles in managing personal finances. Still, some issues are best handled by an attorney – while a CPA is a knowledgeable and certified financial expert who can assist with filing taxes, a tax attorney is often required to adequately handle inconsistencies in tax submissions or audits, particularly when high amounts are in controversy.

Tax law is complicated and requires years of active practice to perfect.  The tax attorneys at Ayar Law have the experience taxpayers require when responding to audits, fighting fraud charges, paying back taxes, and dealing with errors in their filing.

What is a CPA?

A CPA is a professional designation given by the American Institute of Certified Public Accountants. Candidates earn the distinction after completing at least 150 hours of undergraduate studies in either accounting or coursework that satisfied several additional educational requirements.  These requisites include three semesters in auditing, financial accounting and accounting theory, accounting systems and controls, government accounting, managerial accounting, and federal taxes.  Upon completion of the educational requirements, candidates must pass a highly comprehensive CPA examination.  This is a difficult test, and the national average pass rate is typically 45% – 55%.

Like other professional industries, CPAs must complete 120 hours of continued education every three years.  Earning the title of CPA is a rigorous pursuit that is distinguishable from other accountants who may perform accounting functions without even holding a degree.

What do CPAs do?

CPAs are qualified to do everything from preparing and filing individual tax documents to helping large organizations reach their financial goals.  Other services may include:

  • Performing internal audits
  • Completing loan applications
  • Reviewing tax payments and balances
  • Rendering advice on financial matters in general
  • Ensure projects stay on budget.

What are Tax Attorneys?

Unlike CPAs, tax lawyers must satisfy the requirements of state and/or federal bar in which they want to practice. They must graduate from an accredited law school and pass the bar exam(s), including the multistate ethics portion known as the MPRE.  Though not required, many tax attorneys have an undergraduate background in business or accounting.  Once an attorney is licensed to practice law, they must fulfill the Continuing Legal Education and reporting requirements of their state bar.

Though both CPAs and tax attorneys share much of the same knowledge around tax matters, the latter are qualified to represent their clients facing civil or criminal matters in court.

Key Differences Between CPAs and Tax Attorneys

While CPAs are arguably the most knowledgeable professionals when it comes to complex accounting and tax matters, an attorney’s career is more oriented towards handling the litigation that may arise from accounting errors or misrepresentations.  Should you have reason to suspect that your tax filing will arouse scrutiny, a tax attorney can begin preparing for potential litigation by analyzing your tax documents and records.

Another primary distinction between tax lawyers and CPAs is the attorney-client privilege. Though some exceptions recognize a privilege for CPAs and their clients, it is much more limited than that which exists between the attorney and their client. A CPA may be required to answer questions in civil or criminal court, and it is not unusual for them to be compelled to testify against a client.  However, attorneys are rarely required to testify against a client, and will fight against doing so to protect both their client and reputation.  This is enshrined in both the law, as well as the most strongly held norms of our professional community.

Facing Tax Litigation? Call Ayar Law

While both CPAs and tax attorneys offer many overlapping services regarding tax preparation and consulting, only an attorney can help you in the face of litigation. If you or your organization is currently facing an audit, a civil or criminal charge, or if your own internal audit has revealed a discrepancy that you fear will put you on the IRS radar, call Ayar Law to set up a confidential consultation. We can also help with matters of tax relief, unfiled tax returns, and more.