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Taxes. Everyone hates them. Other than the feeling that Uncle Sam is an extortionist, taxes can be complex, confusing and as exciting as watching two snails cage fight.
Accountants are nice despite the fees they charge. However, accountants aren’t necessarily qualified to handle every aspect of your taxes, particularly aspects that can land you in tax court.
Furthermore, it might not be the IRS that initiates court proceedings but rather you. And like any other situation where you’re dealing with the judicial system, it’s not a good idea to represent yourself, no matter how well-spoken you think you are.
Though every US citizen has the right to wave legal counsel and represent themselves, many of those who have attempted such found they were shown little to no respect by the court attorneys or the magistrates.
Hiring a well-respected lawyer who knows the ins and outs of the US tax system is the only way to ensure you achieve the legal verdict you were seeking.
1. Unreasonably High Property Taxes
Owning property means paying property taxes. Most people complain about taxes in general, but property taxes have always been a point of contention for property owners around the world.
However, if we want nice schools, pretty parks, smooth roads, and all the other municipal facilities that make our communities enjoyable, things such as property taxes are necessary.
But some property owners eventually notice they’re property taxes are unreasonably high compared to other property owners in their community. Anyone receiving unreasonable property tax bills, has a right to appeal their property taxes.
It’s important to have the correct individual representing you during the property tax appeal process, such as an attorney who specializes in such matters. According to the Law Offices of Gary H Smith, P.C based out of Chicago:
“Taxpayers and attorneys are the only people allowed to file appeals at every forum. A non-attorney representative may file only at the assessor level, and is prohibited from representing taxpayers at any subsequent appeal forum.”
2. Lower Estate Taxes
One common reason property owners end up taking the IRS to tax court is due to high estate taxes.
Say, for example, upon your death your property exceeds a certain value (usually within the range of several million dollars). Now the heirs to your estate are responsible for paying estate taxes that can reach as high as 40 per cent.
Sometimes, the heirs find it more beneficial to auction off the property rather than keep it. It’s fair to assume that was not what the deceased person had in mind when they left the estate to whomever they had listed as the beneficiary.
Most beneficiaries simply cannot afford such outrageous estate taxes, especially considering they may have been totally unaware of it in the first place.
Firstly, it’s unfair to the deceased since their ultimate wish was to leave something substantial behind for their loved ones.
Secondly, it’s unfair to the beneficiaries who are now forced to auction off the estate they may have hoped to keep.
A good way to avoid this from happening is by hiring a talented estate attorney who is knowledgeable in local, state, and federal tax laws. You can then rest assured that your loved ones receive most if not all of the estate you intended for them to inherit after your passing.
3. Starting a Local or International Business
Another reason many people seek legal tax assistance involves launching a business venture locally or overseas.
Seeking legal assistance prior to launching a business is important because it offers you the opportunity to best decide what kind of business entity you should go with, such as sole proprietorship, partnership, Limited Liability Partnership (LLP), Limited Liability Company (LLC), S corporation, or C corporation.
This can also help you navigate the super complicated world of corporate taxes, as well as help you find ways to save money and pay fewer taxes.
At the same time, legal assistance is definitely a must if you plan on navigating the complications which often arise when starting or moving a business to a foreign country.
4. Bringing a Claim Against the IRS
The other big reason why legal tax assistance might be necessary for you is if you plan on bringing a suit against the IRS or your local tax revenue agency. If you are being charged by the collection agency, and you need an independent review of your case, you absolutely want a lawyer in your corner.
In the event that you have committed some form of tax fraud, such as claiming expenses that you had no right to claim, you will also want to seek legal assistance, or risk going to jail and paying hefty fines.
The Importance Of A Tax Lawyer
Now, these are just some of the cases where it might be very beneficial to seek legal assistance for tax matter. This is a world that can end up costing you a whole lot of money if you are not careful, something which legal representation can absolutely help with.
Ryan Yarbrough is a small business consultant, speaker, and the manager at Davis Financial Services, a small business consulting firm.