What You Need To Know About A Tax Lawyer, And The Contribution He Can Make.
When people think about a tax lawyer they frequently focus on only one area of his expertise. They are thinking about the skill in dealing with the IRS or other dominant taxing authority. At the most basic level, they are interested in whether a particular lawyer has the skill to keep them safe from punishment, largely for income tax violations.
It is that interest, and the related underlying fear that late night television advertising targets. People remember that it was tax evasion that was the undoing of the famous gangster Al Capone. He probably didn’t have a good tax lawyer and went to jail. So they want one to stay out of jail.
The compelling argument for a tax lawyer, rather than a good tax accountant seems to relate to the lawyer client privilege. That appears not to exist with a tax accountant. So the accountant can be compelled to reveal information provided by the client.
Sophisticated business people will use a tax lawyer to provide a completely different outcome. As an aside, most remember the old biblical reference to taxes, rendering unto Caesar that which is Caesar’s. So they file comprehensive tax returns.
This other highly prized outcome is that of minimizing the after tax cost of acquiring a business, while maximizing the corresponding return to the seller. The tax lawyer formulates and proposes one of more tax efficient deal structures. In some cases the ultimate outcome involves a combination of strategies.
Often tax lawyers are also trained as accountants holding a variety of professional designations. They can visualize the balance sheets resulting from implementing their strategies. Their legal training provides the necessary expertise in corporation law, and enables them to recognize whether there is a need for expertise in securities law.
Choosing a tax lawyer presents the same challenges as choosing any other professional. All are not created equal. Remember that every year someone graduates at the bottom of his or her class. And all things being equal, you would probably rather get advice from someone else.
However, it is not as simple as saying that you want the one that graduated top of his class. You need to be very clear on what you wish to achieve. In the case of tax efficient sale/purchase structures, you want someone with proven experience in dealing with transactions similar to yours.
In most transactions, a tax efficient structure can save significant amounts of money. Making your return on your investment in a tax lawyer extremely attractive. Particularly as those with broad experience can tell you very quickly whether your transaction has the potential for significant tax saving.
They won’t encourage you to waste your money if the potential is low. You might want to learn more about getting external advice when you sell your business. To find this external advice about selling your business go to
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You will likely not want to consult the lawyer that wrote your will. Nor the one that looked after your mortgage, your house purchase, or your cousin’s divorce. Being a tax lawyer is a specialty. So you need a specialist.
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