Hiring a Tax Lawyer for Your Small Business: 5 Things to Know

A number of new entrepreneurs find the money matters of starting their businesses among the most difficult and intimidating things they’ll need to go through. Unless it just so happens that an entrepreneur is already well-versed in tax rules and regulations, few will find the idea of these very appealing at the point where the small business is still young and growing. Tax compliance, handling Bureau of Internal Revenue (BIR) audits, filing tax returns—all of these responsibilities may seem particularly burdensome to someone who wants to focus most of their attention on growing their business venture.

Instead of resolving to handle everything on their own, many have opted to hire a tax attorney who can handle the venture’s tax responsibilities with ease. If you’re considering doing the same, here are five things you need to know first about a tax lawyer’s role in your business, from their responsibilities to the qualities you need to look for before hiring one:

1) Tax Lawyers Are Different from Accountants

A common mistake is assuming that tax lawyers and accountants perform the same duties, with their titles being their only difference. But this is actually not true; while accountants focus on filing important documents such as tax returns or financial statements, tax attorneys focus on the legal aspect of taxation. They can provide legal advice, interpret tax laws for easier understanding, represent you in court if necessary, and generally provide a wide range of legal assistance services.

Do note that some tax lawyers are also Certified Public Accountants (CPAs), which allows them to act as both a tax lawyer and an accountant. Depending on your preference, you can keep these duties separate or look for a tax lawyer with CPA credentials.

 2) Tax Lawyers Can Represent You If Necessary

Perhaps one of the most important services a tax attorney can provide is their ability to aid in tax conflict resolution. They can also represent you in conflicts involving the BIR or other tax authorities should it be necessary. For example, if the BIR is suspicious of your return output, they would send a Letter of Authority to your business in order to perform a tax audit.

A tax lawyer can communicate with the BIR on your behalf and clear up any misunderstandings regarding your business’s financial history. Tax lawyers can also represent you for tax evasion cases, in case your business is accused of such.

3) Tax Lawyers Are Necessary, Even Outside of Legal Trouble

You may initially think that entrepreneurs should only hire a tax lawyer if their business ever finds itself in legal trouble. But tax attorneys can also assist business owners even when they’re not in any hot water; in fact, they can help them avoid troubles in the first place. A lawyer can assist with tax compliance, tax planning, and other legal advisory services that will help your business abide by all tax rules and regulations in the country.

Plus, tax lawyers can educate their clients on their rights and responsibilities. This should help an entrepreneur like you make smarter decisions about their business so they can continue growing while also staying clean in the eyes of the law.

4) Tax Lawyers Have Multiple Areas of Expertise

Tax attorneys are specialized in tax law, but many also have extensive knowledge on other practice areas. This can be useful in case you need legal assistance that is not related to tax, but don’t have the funds to hire multiple lawyers for your business.

It’s not uncommon for seasoned lawyers to have additional knowledge on areas such as corporate law, intellectual property, employment and labor, estate planning, or litigation. For example, a tax attorney who is also knowledgeable in estate planning can help with contracts or transferring assets.

Take note that each attorney has their own strengths and weaknesses, and if you’re looking to hire one, then it’s worth asking about their other areas of expertise.

What to Look For In a Tax Attorney

If you’re set on hiring a tax attorney for your business, it’s important to ask all the right questions to potential hires. This is to ensure that they are a correct match for your needs in terms of specialty areas, skills, and experience. Consider asking the following questions during the screening process:

• What are their past experiences working with other companies, if any? In the same vein, do they have experience handling previous tax-related cases?
• Are they specialized in corporate tax law, or do they primarily focus on other practice areas?
• How do they bill for their services?
• How do they plan on keeping you updated?

The Bottom Line: Finding the Best Tax Attorney for Your Business

If you think your small business needs a tax lawyer, then it’s important that you look for one that is a guaranteed expert on the field. Prolific law firms often have lawyers in their team who have many years of experience under their belt and who have handled a wide range of cases.

Be sure to also look for attorneys with positive client testimonials and reviews that show their skill and dedication to their work; you’re best served by lawyers who have excellent track records in the field of tax law and whose reputations are trusted by local businesspeople.