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The Difference between a CPA and a Tax Attorney—And Why It Matters

Tax professionals help individuals and businesses navigate complex federal and state laws. To get the help you need, you must understand which type of tax professional your situation calls for. Do you need a certified public accountant (CPA) or a tax attorney? The answer requires understanding the difference between a CPA and a tax attorney and why it matters.

Understanding the Difference between a CPA and a Tax Attorney in Indiana

For individuals and businesses dealing with complex tax matters in the Hoosier State, understanding the difference between a CPA and a tax attorney is key to getting the services and guidance you need. To determine which type of tax professional you should consult, first consider the type of tax issue you have. Tax matters requiring professional assistance can involve matters like the following:

Many people assume a CPA can handle all of their tax matters. However, depending on the type of service you need, a tax attorney may be the better choice. When deciding whether to consult a CPA or tax attorney, make a list of the services you’re seeking and then compare them to the descriptions below to determine which professional will best meet your needs.

What Does a CPA Do?

CPAs are public accountants who have successfully passed the Uniform CPA Examination. To be eligible to sit for the exam and be licensed as a CPA in Indiana, an accountant must meet all of the following criteria:

  • Completed 150 hours of general education and earned a bachelor or graduate degree from an accredited college or university;
  • Completed a minimum of 24 hours in accounting as an undergraduate, 15 hours at the graduate level, or a combination of the two, including courses in auditing, taxation, financial accounting, and managerial accounting; and
  • Completed at least 24 hours in economics and business administration courses (outside of accounting courses), including six hours in business and tax law and six hours in computer science.

Candidates who meet these criteria and pass the CPA exam may apply to the Indiana Board of Accountancy for a license to work as a CPA in Indiana.

CPAs can serve many functions in meeting their clients’ financial and tax needs. As tax professionals, they help clients with and prepare tax returns for complex tax situations or give tax advice.

They also provide non-tax services, aiding clients with financial matters more generally. In this role, a CPA might manage financial records, perform bookkeeping functions, or help develop business strategies. Additionally, a CPA can perform audits to identify problems and ensure the accuracy of the client’s financial statements.

However, a CPA cannot offer legal advice on a tax matter, nor is a CPA as well equipped to represent a client before the IRS, DOR, or tax court as an Indiana tax attorney. Thus, a CPA is not the best choice for clients who are being prosecuted, fighting tax liens or levies, or seeking to settle their tax debt.

The Difference between a CPA and a Tax Attorney: What Does an Indiana Tax Attorney Do?

An Indiana tax attorney has earned both a bachelor’s degree and a law degree from an accredited law school and then successfully passed the Indiana Bar Examination. A tax attorney can counsel a client regarding the legal ramifications of a situation and can represent the client before the IRS, the DOR, or in tax court. In addition, an Indiana tax attorney can help clients in areas like these:

  • Tax planning;
  • Legal advice on the implications of financial decisions;
  • Advice on how to minimize tax exposure;
  • Advice on how to avoid tax penalties;
  • Advice on the tax implications of various estate planning mechanisms;
  • Advice on business tax law;
  • Negotiation of settlements with the IRS or the DOR; and
  • Representation in litigation before the IRS, the DOR, or the Indiana Tax Court.

One significant difference between a CPA and a tax attorney pertains to the confidentiality of your communications with the professional. An Indiana tax attorney is bound by Rule 1.6 of the Indiana Rules of Professional Conduct to hold confidential all client communications relating to representation of the client. In other words, a CPA can be compelled to disclose client communications, but an Indiana tax attorney must hold all such communications confidential.

How an Indiana Tax Lawyer Can Help

The work of CPAs and tax attorneys can overlap slightly, but only an Indiana tax lawyer provides legal advice on tax matters, is bound to hold your communications confidential, and can represent you in tax litigation, including negotiating settlements such as an offer in compromise or a determination that your taxes are currently not collectible. You’re best served by a tax lawyer in cases like the following that require a legal opinion or representation on a tax matter:

  • The IRS has assigned a revenue agent to your case;
  • You’re anticipating or actively litigating tax matters;
  • You wish to negotiate a settlement regarding your tax debt; or
  • You need a legal opinion on tax matters, such as the tax implications of property distribution in your divorce.

Carmel Fishers tax attorney Julie A. Camden of Camden & Meridew, P.C. has deep experience representing clients in tax matters before the IRS and the DOR, in tax court, and in other civil litigation matters such as divorces. For a consultation to discuss the difference between a CPA and a tax attorney and related tax matters, call 317-770-0000 or complete the firm’s online contact form.

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