Navigating tax relief options whether as an individual or small business, can be overwhelming. Two key professionals in this field are Enrolled Agents (also referred to as preferred agents) and Tax Attorneys. Both can help resolve tax issues, but knowing which one to choose can be difficult depending on your unique situation. In short, Enrolled Agents are tax experts licensed by the IRS, while Tax Attorneys offer legal representation and advice. Simple enough, right?
This article will break down the roles and benefits of each, helping you make an informed decision if you ever find yourself needing representation with the IRS.
The Basics of Tax Relief
Tax relief refers to various programs and strategies designed to help taxpayers and businesses reduce their tax liabilities. This can include reducing the amount of taxes owed, arranging payment plans, or eliminating tax debt through negotiation with tax authorities. The goal is to provide financial relief to individuals and businesses facing significant tax burdens.
Common Tax Issues Requiring Professional Assistance
Below are a few examples of tax issues that are commonly faced by individuals and businesses, ultimately resulting in the need for a tax attorney or other tax relief professional.
Liens: Claims by the government on a taxpayer’s property due to unpaid taxes.
Levies: Seizure of assets to satisfy a tax debt.
Audits: Detailed examinations of tax returns to ensure accuracy and compliance with tax laws.
Understanding these issues and how to address them is critical for effective tax relief. Which is why in many cases it’s important to seek the advice of a tax attorney or enrolled agent to help make your best case and get the most favorable outcome for you or your business.
Enrolled Agents
Enrolled Agents (EAs) are tax professionals authorized by the U.S. Department of the Treasury. They hold the highest credential granted by the IRS. To become an EA, individuals must pass a rigorous three-part exam or have relevant experience as a former IRS employee. At Andrin Tax Relief, our team consists of enrolled agents with more than 30 years experience resolving tax issues.
Roles and Responsibilities in Tax Relief
The primary role of an enrolled agent is to represent taxpayers before the IRS for tax issues including audits, collections, and appeals. Just to name a few. Enrolled agents also specialize in providing tax preparation services and general tax planning and compliance advice. Below are a few examples of common responsibilities of an enrolled agent.
Tax Preparation: Completing and filing tax returns for individuals and businesses.
Tax Planning: Advising on strategies to minimize future tax liabilities.
Representation: Acting on behalf of taxpayers in dealings with the IRS, including audits and collections.
Advantages of Hiring an Enrolled Agent
There are certainly some advantages to hiring an enrolled agent to help with your tax relief needs. Below are a few of the reasons people select an enrolled agent vs. a tax attorney or other tax relief specialists.
Specialized Knowledge: EAs are experts in tax law and regulations.
Cost-Effectiveness: Typically, their fees are lower than those of Tax Attorneys.
IRS Authorization: They have unlimited practice rights, meaning they can represent any taxpayer for any tax matter before the IRS.
Tax Attorneys
Tax Attorneys are legal professionals who specialize in tax law. They hold a law degree and have passed the bar exam in their respective states. Many also hold additional qualifications, such as a Master of Laws (LL.M.) in Taxation.
Roles and Responsibilities in Tax Relief
Tax Attorneys provide a range of services that focus on the legal aspects of tax issues. They represent clients in legal disputes with the IRS, provide legal advice on tax matters, and help with complex tax planning.
Legal Representation: Acting on behalf of clients in court and during IRS disputes.
Tax Planning: Offering strategic advice to minimize tax liabilities.
Legal Advice: Providing counsel on tax laws and regulations.
Negotiations: Handling settlements and negotiations with tax authorities.
Advantages of Hiring a Tax Attorney
When facing serious tax issues, hiring a Tax Attorney can provide several key benefits. Below are a few of the most common reasons that individuals and businesses may elect to hire a tax attorney for tax relief.
Legal Expertise: In-depth knowledge of tax law and legal procedures.
Representation in Court: Ability to represent clients in legal proceedings.
Complex Case Handling: Expertise in managing complex tax issues and high-stakes disputes.
Comparing Enrolled Agents and Tax Attorneys
When seeking tax relief, it can be a little overwhelming to decide what to do, and more importantly who to seek advice from. In this situation, it’s essential to understand the strengths of Enrolled Agents and Tax Attorneys to make the best choice given your unique tax situation. Below are a few of the differences and strengths of tax attorneys and enrolled agents.
Expertise and Training
Enrolled Agents are licensed by the IRS and specialize in tax matters, providing deep knowledge and expertise in tax law. They undergo rigorous exams or have prior IRS experience. Tax Attorneys, on the other hand, hold law degrees and often have additional qualifications, such as an LL.M. in Taxation. Both have extensive training, but their areas of specialization differ: Enrolled Agents typically focus on tax preparation and representation, while Tax Attorneys handle legal disputes and complex legal advice.
Cost Considerations
Cost is a significant factor when choosing between these professionals. Enrolled Agents generally offer more cost-effective services, with lower fees compared to Tax Attorneys. This makes them an excellent choice for routine tax issues and audits. Tax Attorneys tend to charge higher rates due to their legal expertise and ability to represent clients in court, which is more suitable for complex and high-stakes tax matters.
Representation and Authority
Enrolled Agents have the authority to represent taxpayers before the IRS for audits, collections, and appeals. They have unlimited practice rights, meaning they can assist with any tax matter. Tax Attorneys also have this representation power, but they can additionally represent clients in legal proceedings and court cases, providing a broader scope of legal authority.
Case Complexity
For most tax issues, Enrolled Agents provide the necessary expertise and cost-effective solutions. Enrolled agents handle audits, tax planning, and negotiations with the IRS. However, when legal disputes arise, or if you face serious tax fraud accusations, a Tax Attorney’s legal expertise becomes invaluable. Tax attorney’s are best suited for complex cases requiring court representation and intricate legal maneuvering.
In summary, while both professionals offer valuable services, Enrolled Agents often provide a more affordable and specialized approach for most tax relief needs. Tax Attorneys are essential for more complex legal situations which generally come with a higher price tag.
Tax Attorney vs. Enrolled Agent: What’s Best For You?
Now that we’ve reviewed the different strengths and use cases for tax attorneys vs. enrolled agents, you might find yourself wondering which is the best choice for you? Enrolled Agents and Tax Attorneys each offer unique strengths, and the right choice depends on your specific needs.
Factors to Consider
Complexity of the Issue: For routine tax matters, an Enrolled Agent is often sufficient. For legal disputes or tax fraud cases, a Tax Attorney may be necessary.
Budget: Enrolled Agents typically charge lower fees than Tax Attorneys, making them a cost-effective option for many taxpayers.
Specific Needs: Assess whether you need specialized tax advice or legal representation in court.
Questions to Ask
When looking at agencies or individuals to help you with your tax relief needs, there are a few good questions that you can ask to find the best possible representation for your situation.
- What is your experience with cases like mine?
- Are you licensed and in good standing with the IRS or the bar association?
- What are your fees, and what services are included?
Once you have asked these initial questions, it’s important to dig deeper and ask any other relevant questions that come to mind. Ensure you understand their approach and align with them to achieve the best possible outcome.
Importance of a Personalized Approach
It’s important to keep in mind that each tax situation is unique. A personalized approach ensures you receive the best possible advice and representation. Consult with both professionals if needed to determine who best suits your needs. From there, you can ask the right questions and ultimately make the best decision that fits your goals and budget.
Final Thoughts and Next Steps
To wrap up, understanding the differences between Enrolled Agents and Tax Attorneys is a great first step in deciding who to trust with your tax relief needs. Enrolled Agents offer specialized knowledge and cost-effective solutions, making them suitable for most tax issues. Tax Attorneys provide legal expertise for complex cases. Regardless which one you chose, the biggest thing is seeking professional help when being hit by the IRS due to tax issues. Professional help ensures you navigate tax challenges effectively and achieve the most favorable outcome.
If you find yourself facing tax issues for yourself or your small business, consult the Enrolled Agents at Andrin Tax Relief. We are ready and waiting to chat with you about your unique situation, and help you tackle your tax challenges. Contact Andrin Tax Relief today to get started on resolving your tax issues.
