CPA vs Tax Attorney

Updated on April 15, 2024
Article byHimani Bhatt
Edited byAshish Kumar Srivastav
Reviewed byDheeraj Vaidya, CFA, FRM

Difference Between CPA and Tax Attorney

Certified Public Accountants (CPA) and tax attorneys are both professionals who can attend to your tax needs. The primary difference between the two is that, while a CPA holds expertise in dealing with the financial implications of tax matters, a tax attorney specializes in handling the legal aspects of taxation. In the context of CPA vs tax attorney, each role has its benefits and limitations. Both professionals command a good salary and excellent career prospects.

Hiring a CPA or a tax attorney depends upon your specific needs and circumstances. Need to handle financial aspects of tax-related matters or create a long-term tax plan? Hire a CPA. Facing a legal battle with the Internal Revenue Service (IRS), or need a professional to defend yourself in the court? Hire a tax attorney.

CPA vs Tax Attorney

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What is a CPA?

CPAs are licensed accounting professionals who have passed the AICPA-administered CPA exam. The American Institute for Certified Public Accountants (AICPA) coordinates with the National Association of State Boards of Accountancy (NASBA) to conduct this exam and issue the license.

Being a CPA ensures that the professionals have passed their respective State Board of Accountancy’s necessary education and experience requirements. A CPA’s role majorly revolves around fulfilling the client’s needs of accounting, bookkeeping, auditing, and taxation. 

Their license indicates their integrity and expertise in maintaining and auditing financial records and preparing tax returns. While tax attorneys can also prepare tax returns, CPAs have the upper hand due to their years of knowledge and training. 

CPAs can provide efficient tax planning by minimizing an entity’s tax liability while ensuring legal compliance. With an extensive understanding of an entity through its financial records, they offer insightful financial advice and assist business decision making.

In other words, CPAs could keep your account books in order, keep track of your finances, fulfil tax obligations, file tax returns, and provide auditing services. Since they hold thorough financial expertise, they can even advise their clients on financial planning to bring more significant monetary benefit. 

What is a Tax Attorney?

A tax attorney is a state-bar exam qualified lawyer specialized in the legal aspect of taxation. Having vast expertise in tax law, tax attorneys are your best option in dealing with any potential legal matters related to taxes. They can defend your case in tax lawsuits related to inheritance issues, charges of tax evasion, irregularities in tax payments, or withholding tax disputes, etc. 

With an exhaustive knowledge of federal tax laws, a tax attorney is better equipped to defend you in tax disputes with the IRS. Both CPAs and tax attorneys can rightfully represent you in IRS disputes, but what sets the latter apart is their expertise in handling legal matters. 

Unlike CPAs, since they are experts in legal proceedings, they could keep your sensitive information under the wraps. If you need professional legal help with the IRS or continuously receive debt collection notices for tax evasion, hiring a tax attorney would greatly help. They are an expert in negotiation and building arguments around the desired outcome.

Apart from taxation, tax attorneys also specialize in other areas, like estate planning, mergers and acquisitions, litigation, audits, appeals, etc.

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CPA vs Tax Attorney Infographics

The following infographics illustrate the contrasting features of CPA vs tax attorney, outlining the salary, career opportunities, skills, and educational requirements.

CPA vs Tax Attorney Infographics

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CPA vs Tax Attorney – Comparative Table

The professional outlook, career prospects, qualifications required, and salary offered to a CPA and tax attorney differs vastly. Let us explore some major differences in the table below. 

ParticularsCPATax Attorney
DefinitionA state-board licensed accounting professional specializing in the area of business, finance, and taxation.A lawyer specializing in tax rules and regulations.
Career opportunitiesBusiness consultant
Financial advisor
Accountants
CFOs
Auditors, etc.  
Sole practitioner
Corporate legal advisor
Tax attorney at a law firm
Tax Attorney (government)
Estate planning attorney
Litigation attorney
Average annual salary$75,660 per annum$93,127 per annum
Educational requirementsMay vary as per the state board of accountancy. Usually, Passing certificate of Uniform CPA Exam + 150 (at least) college credits + Work Experience  Law Degree + Passing Certificate of State Bar Association Exam
Skills Required
Mathematical and accounting skills
High ethical standards
Research, analytical, and problem-solving skills
Attention to detail
Client focus
Extensive business perspective
Factual and legal research skills
Attention to detail
Mathematical and accounting skills
Effective written and oral communication skills
Strong analytical reasoning skills
Specialization (Tax)Tax preparation and tax planningResolve legal disputes or controversies related to tax
OrientationWorks to avoid tax issuesWorks to resolve tax issues
ExpertiseFinancial accounting, auditing, bookkeeping, financial planning, taxation, etc.Tax law
IRS disputesRepresents the taxpayer before the IRS but lacks required legal expertise.Represents the taxpayer before the IRS and defends him/her well.
US Court of lawCannot represent the taxpayer in the Tax Court as the license is restricted to the issuing state in most casesCan represent the taxpayer in the Tax Court
Benefits of HiringProvides regular accounting and auditing services
Maintains accurate financial statements
Ensures reliable audits
Conducts forensic accounting services to uncover fraudulent business dealings
Offers growth-oriented consulting sessions
Follows efficient tax preparation and filing process
Provides insightful taxation and financial advice
Extends better financial planning
Ensures effective settlement to complicated tax problems
CPAs are more cost-effective as their hourly rates for tax services are less than tax attorneys.
Provides legal assistance in settling tax disputes and lawsuits
Resolves wage garnishment issues
Negotiates with the IRS
Reduces the tax burden on your heirs for the inherited estate
Understands foreign laws and assists in conducting overseas business by ensuring tax compliance
Recognizes prospective tax liability for your business entity type
Offers confidentiality to your matters

Real-life example

Businesses or individuals often face perplexing questions regarding sudden tax hikes by the government. A CPA or tax attorney could provide insightful information to cushion against the financial implications of such hikes. 

The US government recently announced a tax hike on wealthy Americans to fund a welfare plan. It raises the household’s capital tax rate to 39.6%. Family-owned businesses, farms, and estate planners are apprehensive about how it would impact their finances.  

Some experts suggest taking the help of a CPA or tax attorney to understand the implication of the tax hike to shield against its impact.

This article has been a guide to CPA vs Tax Attorney. We compare CPA to a CPA Tax attorney salary, role, and salary with infographics and a comparison table. We also discuss the exam requirements for both. You may also have a look at the following articles –

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