In the Case of a Tax Controversy, Should You Turn to a CPA or a Tax Attorney?

Feb 4, 2019 | Business, Tax

Have you ever received notice from the IRS or the State Tax Commission that there was a problem with one or multiple of your tax returns?  If so, who do you turn to in that situation? When it comes to taxes and tax issues many people first think to go to their accountant, however, in certain situations, your accountant may not be the best option.  A tax attorney may be able to provide you with more protection and be a better guide as you try to navigate the muddy waters of the legal side of tax matters.  A tax attorney can provide you with the right protection because of the privilege that accompanies attorney-client relationships, and because of the legal experience an attorney brings to the table.


If you are having tax troubles with the IRS or the State Tax Commission, only an attorney can provide you with attorney-client privilege, meaning your attorney cannot be forced to divulge any matters that are discussed between you and your attorney.  On the other hand, no such privilege is given to the accountant-client relationship.  Why does this matter?  If you try to solve your tax problems through your accountant, your accountant could be forced to testify against you, meaning they would be legally obligated to divulge the substance of any communications or discussions you had with them.  The person that would be most intimately familiar with your financial and tax situation would have to provide any and all information about your situation, no matter how damaging to your case it may be.

Tax errors come in all forms, some are accidental, caused by a very confusing and muddled tax code; others are more deliberate in nature, under either circumstance your attorney cannot testify against you.

If you were to hire a tax attorney and your attorney then engaged your accountant for assistance with the tax matters, there would then be privilege with the accountant because they would be operating under the guidance and direction of your attorney.  By engaging an attorney first, and then having your accountant assist with the matter, you will be afforded much greater privilege and confidentiality and have the best possible resources to assist you in your tax disputes.

Legal Experience

The other advantage to engaging a tax attorney, is that attorneys have been trained and have much greater legal experience than accountants do. Attorneys are experienced in working with opposing parties, negotiating, working towards settlement and working cases through trial.  Tax attorneys are trained in researching, reconciling, and understanding the finer legal nuances of the law, especially the tax code.

This is not to say that tax attorneys are preferred for all aspects of tax matters, accountants are much better suited to handle tax preparation, the day-to-day financial matters involved in running a business, and those one-off tax questions that can come up as your business grows and evolves.  Furthermore, accountants’ experiences with your individual tax matters make them an invaluable part of defending your tax position against the IRS or state tax commission.  Most accountants, however, are just not legally trained or experienced in the finer aspects of litigation, while the opposing party, the IRS or State Tax Commission, will have very highly trained tax attorneys fighting against you.

By engaging a tax attorney, you are protecting yourself as you try to resolve your tax matters with the IRS or the State Tax Commission.  A tax attorney will afford you privilege and legal experience that you may not get if you rely solely on your accountant.  Additionally, a good tax attorney will work with your accountant to make sure all resources needed to reach a resolution are available to you.

JensenBayles, LLP provides a broad spectrum of legal services.  Please visit our web site or call 435-674-9718 and ask for B.Cory Lee. The information in this article is for educational purposes only and is not intended to be construed as legal advice. Please contact an attorney for legal advice specific to your situation.

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