When Should Small Business Owners Talk to a Tax Attorney?

If you’re a small business owner, you know how complicated it can be to handle corporate tax issues. Even before your business is up and running, you’ll have to make decisions that impact your business taxes. This is why so many business owners decide to hire tax attorneys.

A tax lawyer can be helpful in a variety of ways. Some people consult with a legal tax professional when they decide to expand their business or take on a new business partnership. Others only call a tax lawyer when they’re having trouble with the IRS. For example, they call a local tax attorney when they receive notice of an IRS audit.

Here, we’ll describe some reasons why a local tax attorney can be helpful in your business. We will also discuss situations in which a tax law attorney can come in handy. Contact a local tax lawyer if you’re dealing with a tax problem and need immediate help.

A Tax Attorney Can Help Set Up Your New Business

One of the most important decisions you’ll make when setting up your business operations is your business structure. There are tax implications depending on which type of organization you start.

For example, if you plan on opening a partnership with another person, you’ll need to know how you will share tax liabilities. You’ll also want to consult an attorney for tax planning, especially in the early years.

You will have tax-related questions if you plan to operate as a sole proprietorship, partnership, or corporation. You’ll also want an attorney to go over the advantages and disadvantages of each type of business structure. This can save you a lot of money (and headaches).

A Tax Lawyer Offers Protection During Mergers and Acquisitions

If you merge with another company or acquire another firm, you should meet with an experienced tax attorney. Even if your company has been open for years, you must protect yourself should the other party try to take advantage of you.

One thing you’ll want to do is review the other company’s tax returns. This is the only way to know whether it’s solvent or if it will create untenable tax issues for your organization.

You’ll also want to ensure the other company doesn’t have problems with the state or local tax authorities. For instance, you’ll want to know if there are federal tax liens against the company’s assets.

A Skilled Tax Attorney Will Represent You in Criminal Tax Matters

The last thing any business owner wants to consider is getting into criminal trouble over tax issues. Unfortunately, you don’t want to handle it alone if the IRS pursues you for possible criminal tax evasion or tax fraud.

Tax professionals, such as certified public accountants (CPAs), can be helpful when it comes to preparing your taxes. They can even prove beneficial during a tax audit. However, you’ll want an attorney to see you through when facing criminal repercussions.

The Tax Code is very clear on the penalties for these tax crimes. Depending on the type of business entity you operate, you may be personally liable for problems with your business taxes. Even if the allegations aren’t true, you’ll want a business lawyer there to help explain things to the government.

You May Need to Consult a Tax Attorney to Help with Employment Taxes

When you first embark on your startup, you may have zero experience dealing with employment taxes, payroll taxes, and other business issues. You’re liable to make a few mistakes. Sadly, these mistakes can result in hefty fines and other penalties.

Even if you own a limited liability company, you may be at odds with the IRS over employment taxes. Having a lawyer there to help with these legal issues can mean the difference between paying thousands of dollars in penalties and interest and working out an arrangement with the IRS.

Don’t Forget About Estate Planning

Many business owners forget the importance of addressing what happens should you or another business owner pass away. It’s never a good idea to assume that your business partner will handle things fairly once you’re gone.

Estate planning may seem like something that only concerns your personal assets. However, even small to medium-sized business enterprises can benefit from wise estate planning.

This is why it’s also a good idea to seek legal advice about your estate plan before opening your doors. Your tax attorney may be willing to help. Otherwise, you can seek specific advice from an estate planning attorney. This way, you’ll have the peace of mind of knowing that your family will be taken care of should something happen to you.

Have a Tax Attorney on Hand for Business Tax Issues

Most business owners don’t need an attorney to help with the day-to-day business operations. However, there are bound to be times when the advice of a skilled attorney will prove helpful with your business needs. Perhaps you want a legal professional to review your partnership agreement. Or you may want a tax lawyer to help with probate should your business partner die.

Whether you need help with a tax dispute or want to ensure your company’s tax compliance, it’s a good idea to consult a seasoned tax lawyer. The costs of hiring a tax attorney will be well worth it.