The Financial Benefits of an Experienced Tax Compliance Attorney

There are a few things in life that you should leave to the professionals, and tax compliance is one of them.

According to a 2012 report to Congress from the Taxpayer Advocate Service (TAS), individuals and businesses spend 6.1 billion hours every year complying with tax code regulations, and that calculation doesn’t even take audits or investigations into account. Beyond just the time you can save working with a tax compliance attorney, you must consider the potential costs of not working with one.

Companies and high-net-worth individuals who try the DIY approach to tax compliance issues may find out the hard way that it can be expensive to make a mistake in this arena.

Making a mistake with tax compliance can be expensive; it’s better to leave it to the pros.

Audits, Fines and Fees

In 2019, the IRS assessed over $40 billion in civil penalties. The category with the highest penalties ($14.2 billion) was individual and estate and trust income tax returns.

Close behind that were employment tax penalties at around $13.7 billion, with business income tax penalties over $5 billion. Those fines were the result of more than 73,000 cases that the IRS closed in 2019, some of which began more than a year prior.

The IRS has a virtually unlimited capacity to assess fines and fees if they find anything wrong in your tax returns, even if it was an unintentional error or omission. They audit millions of individuals and corporations each year, and pursue criminal and civil charges to collect.

Time and Effort to Respond

In addition to the financial risks of getting hit with fines and fees, companies and high-net-worth individuals also need to consider how much it costs to respond to and participate in an audit.

The sheer volume of information that the IRS requests can leave you or your staff buried in financial documents for weeks, months or years in some cases. Once the IRS opens an audit or investigation, they will spend as much time as it takes to see it through.

Hiring a Tax Attorney is the Better Way

As Benjamin Franklin is quoted saying in a 1789 letter to Jean-Baptiste Leroy, “… In this world nothing can be said to be certain, except death and taxes.” Though there is not any way to avoid taxes entirely, with the help of a tax compliance attorney, you can feel confident that you are not unintentionally violating any of the myriad tax laws and regulations.

That doesn’t mean the IRS will never bother you, but it does significantly diminish the risk that you will be the subject of an investigation for noncompliance.

Contact Cantley Dietrich to discuss your tax compliance needs with our experts.