HOW MANY TAX GUYS DO I NEED?

According to the magazine The Economist, more man-hours are spent each year on tax compliance than by the entire federal workforce.  How many tax advisors do you need? The answer may be, as many as three.  First, you need a CPA.  Second, you may need a tax-compliance attorney, to help you structure your deals and purchases.  That attorney’s role and the CPA’s merge a little, yet you may need both depending on the complexity of some operations.

But what happens if the IRS sues, or if you need to sue it? (In most circumstances, tax law demands that you pay whether you agree with the IRS ruling or not, and sue – that is, appeal the IRS’ decision – later to try and get the money back.)  Contesting an IRS decision is a process that is closer to appeals than to trials, and more to the point, nearly foreign to the kind of work CPAs or compliance attorneys usually do.  There you need a litigator, comfortable with appeals, a third “tax guy,” whose talents are entirely different than the other two.  He will be able to argue in court why one specific section of the code works in your favor, not the IRS’.

When dealing with something as complex as taxes, there may not be a one-stop shop, much as most of us might wish there were, if only for simplicity’s sake.