Who said that the only things in life that are certain are death and taxes? It turns out it was none other than one of the founding fathers, Benjamin Franklin, and what a quote it is! What he touched on was that no matter what happens throughout your life, you will certainly end up dead, and the government will undoubtedly dip its hand into your pocket when it so desires! Nevertheless, every year, more and more people get tangled up in the mess of tax law and, ultimately, end up paying more or unwittingly falling foul of the law. Fortunately, there are plenty of skilled tax attorneys who can help you through a range of tax issues, six of which will be covered in this post.
They Can Represent You In Tax Court
One of the worst things that can happen in anyone’s life (outside of death and serious criminal activity) is being hauled into court to answer for alleged tax offenses. Tax attorneys understand how to present complex facts before the court and to effectively argue on your behalf as they assist you during all aspects of litigation, such as:
- Research
- Discovery
- Pre-trial conferences
- Mediation
- Trial
- Be someone who is on your side against the onslaught of government lawyers
They will be able to negotiate usage agreements or create donation documents if necessary. Experienced tax lawyers also know how to approach assignments and audits in the most efficient manner possible. However, you should make sure to hire a local attorney who understands your jurisdiction inside out. For example, if you are located in the North Star State, a tax dispute attorney in Minnesota will represent you far better than one from New York. Further, tax attorneys are trained to review financials like bank statements or loan applications to understand your case better and develop an effective litigation strategy. Not only can they represent your interests before the IRS office, but they have a great understanding of these regulations so that they can provide sound legal advice when dealing with any tricky situation that you might face when dealing with issues surrounding any tax investigation you might be a party to.
They Can Assist You In Preparing And Filing Your Taxes Correctly
A good lawyer can provide invaluable help when you’re dealing with taxes. First, they can assist you in preparing and filing your taxes correctly. This means ensuring all the correct paperwork is included and that all calculations are done accurately. It also means ensuring the law is appropriately interpreted so you don’t miss any deductions or credits that could save you money (covered in the next point). For example, sometimes, understanding the laws related to a retirement plan can be difficult. An experienced attorney will understand these laws and help you determine which types to use according to your financial goals and objectives. Finally, a skilled lawyer can defend you if there’s an audit or if there are mistakes or disagreements on your return. They have experience in the courtroom and will be able to negotiate with the taxing authorities on your behalf for a fair resolution in case of a dispute.
Identify Deductions And Credits Available To You
Not everything related to government and taxation is entirely bad. In some cases, they even attempt to help you reduce your burden by offering a range of deductions and credits to help facilitate business or simply reduce the financial stress of family life. A knowledgeable lawyer will protect your interests by finding every legal deduction available to reduce your tax burden as much as possible while remaining firmly within the law (remember that tax avoidance is not the same as tax evasion). Tax deductions are reasonable business expenses that reduce the taxable income, while credits are reductions in the tax itself. A lawyer can help you identify which deductions and credits will save you money on your taxes. They may also be able to suggest methods for generating more financial records, such as invoices and receipts, to maximize the value of these savings opportunities.
Negotiate With The IRS On Your Behalf
The IRS is infamous for being full of overly inflexible bureaucrats who never seem to understand that nuance is a thing that exists in the world. However, while the average person might not have the requisite skills to deal with them effectively, a tax lawyer may be able to help. Most lawyers, tax or otherwise, are skilled negotiators who understand how the system works and how to work it to your advantage. Through their negotiation skills, they may be able to get the IRS to reduce your debt or grant you an installment plan that allows for more flexibility than just paying it all in one lump sum.
Offer Expertise In Estate Planning And Asset Protection
If you are looking to build your wealth and develop an estate to pass on to your loved ones when you are no longer around, an attorney can be invaluable. A lawyer can help you create an estate plan that provides for your family in the event of death or disability. An estate plan can include life insurance policies, trusts, wills, power of attorney documents, and more tailored to fit your needs. Asset protection is another area where a good lawyer comes in handy. They will work hard to structure assets so that creditors cannot access them in order to ensure continued financial stability even if something unfortunate happens, like going bankrupt or getting hit with a lawsuit. Lawyers have many tools at their disposal, from setting up trusts to creating LLCs or corporations; whatever you think may help protect your assets, a skilled lawyer will know best how to keep you fiscally liquid and able to enjoy your life.
Reducing Your Inheritance Tax Burden After You Pass Away
Although the US doesn’t have any inheritance tax laws at the federal level, it does have an estate tax. Moreover, each state has its own laws regarding inheritance, so in some cases, you could be doubly penalized for simply having the tenacity to work hard and make money! Nonetheless, a skilled lawyer also can help you structure your will in ways that can further reduce the amount you owe in inheritance taxes. An experienced lawyer can provide insight and guidance on how to set up a tax-deferred trust or how to adjust your decisions about leaving your property or gifting money to loved ones so they can enjoy it while you are alive and will reduce the bill after you’ve left this mortal realm.
Franklin may have been right about his famous quote in the introduction of this post. However, he left out the fact that an experienced lawyer will take the sting out of any tax issues that may arise. By leveraging their expertise, you can lower your tax burden, mitigate the impact of litigation, and even deal with the dreaded IRS.
