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Tax Lawyer vs Tax Accountant – Deciding Whom to Retain

Who hasn’t lost a staring contest with a tax declaration?

We’ve all been head to head with intimidating tax forms. They’re cumbersome, excruciatingly detailed, and the stakes are very high.

A mistake in your cra tax forms can be very costly, particularly when you’re running a business. That’s why, come tax season, so many of us are quick to turn to a professional.

Getting your taxes done by a pro is the best way to avoid major headaches down the road. But deciding on the right professional for you isn’t as easy as it sounds.

The merits of retaining the services of a tax lawyer vs a tax accountant depend on several factors. In this article, we’ll talk about the roles of tax lawyers vs. tax accountants, whether you need both, and more.

Understanding What a Tax Accountant Does

So, what exactly is a tax accountant, and what can they do for you? Well, to understand that, you need to a bit about how taxes work. There are two stages to proper fiscal practices.

First, you have tax planning. Most major financial decisions have some fiscal repercussions, and for a business, these can be quite complex. Tax accountants put together strategies to minimize income tax and other forms of taxation.

On the other hand, tax accountants have a duty to assist their clients with their yearly tax returns. They ensure that forms are filled and filed by the proper deadlines, seek out deductions, and read the fine print. They keep a taxpayer on the right side of the law, (and the Canadian Revenue Agency).

In that sense, tax accountants are a proactive approach to tax problems. They guarantee that problems will be avoided and taxable revenue will be minimized.

“If you or your company are facing serious tax issues with the CRA, we can help. Schedule your assessment today.”

When Should You Work With a Tax Accountant?

Retaining the services of a tax accountant can be a great idea in a number of situations. The exact circumstances when you should seek out a CPA depend on your particular situation.

For example, retaining the services of a CPA to assist in filing your taxes can be more than sufficient. A business owner, however, has very different taxation requirements and needs. For more complex tax issues like net worth audits and voluntary disclosures, the line can often be blurred between a tax lawyer and tax accountant. Consult Faris CPA today to see what the right option is for you.

Smaller companies typically have a tax accountant on retainer to deal with their large volume of deductions and paperwork. Larger companies have internal accounting departments and still retain the services of independent CPAs to audit their filings.

Even taxpayers familiar with filing their own returns sometimes need the services of a tax accountant. For others, when filing their first returns as a couple, or after a divorce, professional counsel can be helpful.

“Sam is one of the most professional people I have dealt with. His dealings with CRA are amazing. No need to hire a Tax Lawyer to battle CRA, Sam is the one that fights for you, protects you and gets the job done. All at reasonable costs. Highly recommend him for any difficulties with Canada Revenue.”

Understanding What a Tax Lawyer Does

A tax lawyer is a related, but quite distinct professional. Tax lawyers are lawyers, and they specialize in tax law, fiscal regulations at federal, provincial and municipal level, and more. A tax accountant in Toronto needs to keep up with different regulations than one in Montreal.

A tax lawyer is also experienced in a number of business and legal matters not specifically tax-related. They can handle many situations that a tax accountant or CPA cannot.

Tax lawyers represent their clients in cases involving the Canadian Revenue Agency or other authorities. They also represent clients who are leaving taxable estates to their children after they pass.

Another crucial role a tax lawyer has is providing legal counsel to business owners (or prospective business owners). The way you set up a business can have huge tax ramifications later on.

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When Should You Work With a Tax Lawyer?

While most people need tax accountants on a seasonal basis, the approach to tax lawyers is more reactive than proactive. Certain situations and conditions merit the counsel of a specialist in tax law, but they’re rather specific.

Obviously, if the CRA is knocking down your door, you probably need a tax lawyer. But retaining the services of a tax lawyer long before things come to that point is the real problem-solver.

Business owners should preemptively consult tax lawyers to get strategic advice on how to organize their company and holdings.

In much the same pay, those who are leaving an estate behind may want to seek out a tax lawyer. Implementing a smart strategy before it’s too late can save our loved ones much trouble.

If you are exploring a lawsuit or a claim against the CRA, a tax lawyer is absolutely of the essence.

Not sure if you need a tax lawyer or tax accountant? Contact Faris CPA today for an initial consultation. Click here to get started.

Does it Benefit to Have Both?

If you’re pondering the benefits of having a CPA vs a tax lawyer, you may be thinking about it the wrong way. A tax accountant and a tax lawyer have related expertise, but very different functions.

An individual who is facing issues with the CRA will probably want both a tax lawyer and a tax accountant. The tax accountant should sort your records straight for any necessary CRA audits, while your tax lawyer devises your legal strategy.

Companies need tax lawyers and tax accountants for very different reasons. Tax lawyers should assist in the founding and fiscal structuring of the organization. Tax accountants should advise companies on fiscal strategies and deal with matters of compliance.

Tax Lawyer vs Tax Accountant – Deciding Whom to Retain FAQs

 

  • Can a lawyer be an accountant?

Definitely. However, It’s very uncommon. Both law school and becoming a CPA are very challenging processes. Few people decide to attempt both, and fewer still accomplish it. Still, they do exist. Some CPAs become lawyers for the privilege of lawyer-client confidence.

  • Do accountants go to law school?

CPAs do not typically attend law school. Chartered Professional Accountants have to obtain certification, and one of the requirements is a degree in Accounting or related fields. They are most often taught at Business or Finance schools in universities.

  • Do you need a CPA to be a tax lawyer?

You do not need to be a CPA in order to be a tax lawyer. Tax lawyers are intimately familiar with tax legislation, but they don’t need to be certified CPAs.

Testimonial

Sam Faris reduced the significant unreported income based on net worth audit to be nil. Sam’s approach in fighting these types of complex audits is unique and sophisticated. He found countless mistakes made by the auditor which were rectified when Sam appealed the audit decision. Instead of owing significant amount of taxes, Sam reduced it to zero. I highly recommend to hire Sam for this type of audits and any CRA problem.”

E.M., Ottawa