What Is the Difference Between CPAs and Tax Attorneys?

Nearly one in three Americans admit that filing taxes is a scary ordeal. It’s a more complicated experience when business owners encounter troubles with the Internal Revenue Service (IRS) for breaking a regulation.

In such a scenario, should you call a certified public accountant (CPA) or tax attorney to step in and protect you from IRS enforcement or sort out your financial records?

It’s important you gain knowledge to make the right decision when you’re faced with both choices. This blog breaks down the key differences between CPAs and tax attorneys, explains when each is appropriate, and helps you understand why legal issues with the IRS require more than just accounting help.

What Does a CPA Do?

A Certified Public Accountant (CPA) is an accountant who’s trained and licensed to manage and interpret sensitive financial records and practices for large entities. Essentially, a tax advisor or financial advisor (with an emphasis on the advisory role).

CPAs are trained to help both individuals and businesses maintain accurate financial records, comply with tax laws, and optimize their accounting systems. They play an essential role in tax preparation, financial reporting, and strategic planning. Still, they are not legal advocates and do not represent clients in court, although they can represent clients in IRS meetings.

To become a Certified Public Accountant, individuals must:

• Complete a bachelor’s degree with a focus on accounting or finance,

• Pass the Uniform CPA Examination administered by the American Institute of Certified Public Accountants (AICPA),

• Meet the experience requirements set by their state board of accountancy.

• Maintain licensure through ongoing continuing professional education (CPE).

Primary Responsibilities of CPAs:

• Tax Return Filing: Preparing and submitting individual and business returns.

• Bookkeeping & Payroll: Managing day-to-day financial operations like employee compensation and ledger maintenance.

• Financial Accounting: Producing reports such as balance sheets, income statements, and statements of cash flow.

• Internal Auditing: Assessing the accuracy and compliance of internal financial processes.

• Advisory Services: Providing guidance on budgeting, deductions, or entity selection for small business owners.

What CPAs Don’t Do

CPAs can be masters of tax avoidance, tax relief, or debt relief, but their power has its limits in the tax ecosystem. The single biggest one is their incapacity to practice law and authority only within financial and tax-related compliance. Specifically, CPAs:

• Cannot represent clients in U.S. Tax Court or federal court,

• Lack of attorney–client privilege, which means conversations with them can be subpoenaed,

• Do not typically handle IRS legal disputes, such as tax liens, levies, or criminal investigations,

• Typically do not negotiate complex legal resolutions like an Offer in Compromise or Currently Not Collectible status.

Because of these limitations, CPAs typically refer clients to tax attorneys when legal disputes with the IRS arise. Their strength lies in prevention and planning, not litigation or legal defense.

What Does a Tax Attorney Do?

When the Internal Revenue Service escalates, it’s not your financial statements they’re after but your compliance. In short, it becomes a legal issue. A tax attorney or tax lawyer is a professional trained and authorized to deal with the volatile situation, where mistakes can lead to tax liens, levies, or worse, incarceration.

Unlike CPAs, tax attorneys are licensed legal professionals specializing in federal and state tax law, IRS defense, and legal tax resolution strategies. Their job isn’t to balance your books—it’s to protect your future when the IRS is already looking your way.

 Education and Licensing

Tax attorneys hold a Juris Doctor (JD) and are admitted to the state bar. Many also complete advanced tax education, such as an LL.M. in Taxation. What sets them apart legally:

• They can represent clients in the U.S. Tax Court and federal court,

• Their communication is protected under attorney–client privilege,

• They are trained to analyze, interpret, and apply complex tax statutes, not just regulations.

This means when you’re under pressure—from audits to allegations—a tax lawyer has both the knowledge and the legal standing to step in and defend you.

Core Services Tax Attorneys Provide

A tax attorney handles cases involving:

• IRS audits and appeals

• Wage garnishment and bank levy release

• Tax lien removal

• Offer in Compromise (OIC) negotiations

• Currently Not Collectible (CNC) status applications

• IRS Installment Agreements tailored to your financial capacity

• Defense against IRS criminal investigations or whistleblower-triggered cases

These aren’t theoretical skills. They’re legal actions that protect clients from asset seizure, passport denial, or civil and criminal penalties.

Legal Privilege and Protection

One of the most critical differences between tax attorneys and other professionals like CPAs is the attorney–client privilege. Communications with a tax attorney are legally protected and cannot be disclosed without the client’s permission, even in court. This is particularly important in cases involving potential criminal exposure or sensitive financial disclosures.

In contrast, CPAs and enrolled agents do not have full legal privilege, meaning documents or conversations with them can be subpoenaed during an investigation.

When You Should Hire a Certified Public Accountant (CPA)

A certified public accountant’s services are best used before problems with the IRS arise. They particularly play an essential role in helping individuals and businesses stay compliant, organize their finances, and prepare tax returns accurately.

Many CPAs assist with entity selection, budgeting, financial modeling, and profitability assessments. While they can provide guidance on business structure for tax efficiency, this advice remains financial, not legal in nature.

When You Should Hire a Tax Attorney

While CPAs are highly skilled at managing financial records and filing taxes, there are situations where the expertise of a tax attorney is not just helpful—it’s essential. Tax attorneys are uniquely qualified to handle legal disputes, IRS enforcement, and complex negotiations that fall outside the scope of financial accounting.

1. IRS Audits and Investigations

If you’ve received a notice from the IRS regarding an audit, especially one that spans multiple tax years or suggests serious discrepancies, legal representation is highly recommended. A tax law professional can develop a legal defense strategy, represent you during all stages of the audit process, and protect your rights under federal law.

2. Back Taxes and Unpaid Tax Debt

When tax debt goes unresolved, the IRS may begin aggressive collection efforts, including wage garnishments, bank levies, and federal tax liens. A tax attorney can evaluate your financial situation and negotiate with the IRS to establish a resolution, such as an Installment Agreement or an Offer in Compromise.

3. IRS Enforcement Actions

In cases where the IRS has already begun enforcement, like placing a lien on your property or issuing a levy against your bank account, legal intervention becomes critical. Only a tax attorney can respond to these actions with the appropriate legal tools, such as appeals, collection due process hearings, or injunctions.

4. Criminal Tax Allegations or Fraud Investigations

If the IRS suspects tax evasion, fraudulent returns, or willful underreporting, your case could be referred to the IRS Criminal Investigation Division. This level of enforcement requires immediate legal counsel. A tax attorney is trained to handle potential criminal exposure and can interact directly with investigators to mitigate legal risk.

5. Whistleblower or Informant Claims

The IRS Whistleblower Program has grown significantly in recent years, awarding over $123 million in a single fiscal year to informants who report tax fraud. If someone has submitted information about your tax filings or business practices, you could face scrutiny before receiving formal notice. A tax attorney can proactively address the issue, evaluate exposure, and pursue resolution options.

6. Complex Tax Settlements

Tax attorneys routinely manage complex legal solutions like:

• Penalty abatement requests based on reasonable cause,

• Innocent spouse relief,

• Negotiations involving large-dollar liabilities,

• Disputes over business deductions or entity classification.

These matters often require in-depth knowledge of both tax statutes and case law, well beyond what a CPA or enrolled agent can provide.

Do You Need Both a CPA and a Tax Attorney?

Tax attorneys and CPAs often work in tandem, but their roles are distinct, and one should never be mistaken for the other. In more complex or high-stakes tax situations, the collaboration between these professionals can offer both financial precision and legal protection. However, the key is understanding where one’s expertise ends and the other’s begins.

A CPA is typically your first line of defense when it comes to tax planning, financial reporting, and return preparation. They help ensure your numbers are accurate and your filings are compliant. But when a financial issue crosses into a legal one, such as an IRS audit, collection action, or criminal investigation, it’s no longer within most CPA’s scope to lead. At that point, you need a tax attorney who is trained in substantive tax law, experienced with IRS procedure, and authorized to appear before tax courts or federal judges.

According to legal tax experts, this type of dual support is most effective when the CPA focuses on the books, while the tax attorney manages the legal posture of the case, especially in disputes with the IRS. In fact, this collaborative dynamic is often compared to a “symbiotic relationship”, where each professional brings specialized value to a shared goal: protecting the client’s best interests.

However, it’s important to note that while both CPAs and tax attorneys can represent taxpayers before the IRS (via Form 2848), only tax attorneys are licensed to provide legal advice and appear in tax court. This legal capacity is critical in high-stakes situations involving penalties, litigation, or the risk of criminal prosecution.

Partnering With A Tax Law Firm

Tax law firms, like J David Tax Law, offer a uniquely comprehensive approach to resolving legal tax issues. They offer an intersection of tax law, IRS procedure, and tax audit representation, which goes beyond accounting or tax preparation.

A Specialized Legal Approach

Tax law firms are staffed by licensed attorneys of tax law who often hold advanced degrees in taxation. Their work centers on:

• Interpreting complex tax statutes,

• Crafting legal arguments,

• Protecting clients’ rights in administrative proceedings and litigation.

A tax law firm is where you can find a smart tax advisor who can easily navigate the fine line between tax avoidance and tax evasion. This specialization allows them to address high-risk situations with both legal strategy and procedural knowledge, a practice CPAs and enrolled agents are not trained or licensed to do.

Making the Right Choice for Your Tax Situation

Navigating your tax obligations takes a great deal of expertise and careful decision-making to stay compliant. A certified public accountant keeps your books organized, while a tax attorney steps in when the Internal Revenue Service (IRS) raises questions or takes action. Tax attorneys are trained to deal with legal disputes, negotiate with the IRS, and protect you when financial issues become legal consequences.

Whether you’re a business owner managing back taxes or an individual facing an unexpected audit, having the right professional matters. Sometimes, that means working with both a CPA and a tax attorney.

If you find yourself in a difficult tax situation despite doing your best to stay compliant, help is available. J. David Tax Law focuses on representing individuals and businesses in complex tax matters. With decades of experience, their attorneys provide the legal insight and support needed to resolve tax issues confidently and correctly.