What’s the difference between a CPA and a tax attorney?

While both certified public accountants (CPAs) and tax attorneys can provide you with tax support, a CPA is limited on the scope of the advice they can provide.

In the business context there are a number of ways that a CPA or an attorney may need to be involved. They can both help with tax planning to minimize the amount of taxes owed or maximize tax benefits, evaluate the tax implications of particular transactions, and in most instances defend the business in tax controversy matters before the state or IRS. However, CPAs cannot represent clients before the U.S. District Courts.

However, while CPAs may be more cost effective for doing tax return preparation, CPAs cannot advise on the potential liabilities or protections of certain structures and decisions for the company and cannot assist with the legal documentation necessary to effectuate those decisions. For instance, a CPA can tell you that it makes tax sense to switch from an LLC to an S-Corp, but most states prohibit them from preparing the paperwork or advising on the legal implications of the switch.

Having both a CPA and a tax attorney available to call when you need assistance is crucial for any business, and most often they will tell you whether the question is outside of their domain. LawTrades can connect you with a knowledgeable tax attorney for a free 20 minute consultation to discuss your needs and whether they are the right person to assist you.