When a tax problem shows up, clients often aren't sure who to call first: their CPA or their attorney. The honest answer is usually both, but they play very different roles. Understanding the difference can save you money and protect you in ways you might not expect.
I work alongside CPAs on a regular basis. The best outcomes I've seen almost always involve close coordination between the two of us, not one professional trying to do the other's job.
1. Your CPA handles compliance, I handle controversy
Your CPA is typically the person preparing your returns, managing your books, and advising on the ongoing accounting decisions that keep your business or personal finances in order. That work is essential, and it's not something most attorneys are equipped, or licensed, to do.
My role generally starts when there's a dispute: an audit, a collection notice, a disagreement with a taxing authority, or a legal question about how a transaction should be structured. Compliance and controversy are related, but they're different skill sets.
2. Privilege is the reason this distinction matters most
Communications between you and your attorney are generally protected by attorney-client privilege. That means, in most circumstances, I can't be forced to disclose what you told me in confidence.
Communications with your CPA don't carry that same protection in most situations. There is a limited accountant-client privilege in certain federal tax matters, but it's narrower than attorney-client privilege and doesn't apply in many contexts, including most criminal tax matters or state proceedings.
That difference matters enormously if a dispute is serious or could turn adversarial. Sensitive conversations about what happened and why are often better held with an attorney, sometimes through what's called a Kovel arrangement that brings the accountant under the attorney's privilege for a specific purpose.
3. Complex structuring calls for legal judgment
Business formations, entity restructuring, buy-sell agreements, and succession plans all have tax consequences, but they're fundamentally legal documents with legal consequences beyond taxes. That's where an attorney's role expands beyond controversy work into planning and drafting.
A CPA can and should flag the tax implications of a structure. But the entity documents, the contractual language, and the legal exposure that comes with them need an attorney's eye.
4. Litigation is squarely legal territory
If a dispute escalates to the U.S. Tax Court or another court, that work belongs to an attorney. CPAs can be valuable witnesses or consultants during litigation, explaining the numbers and the accounting decisions behind them, but they generally aren't the ones representing you in court.
5. Coordination produces the best outcome
The clients who fare best are the ones whose CPA and attorney talk to each other throughout the process. Your CPA understands the financial history and the numbers better than anyone. I bring the legal strategy, privilege protections, and controversy experience.
When we work together early, rather than after a problem has already escalated, we tend to get ahead of issues instead of reacting to them.
If you're facing a tax problem and want to make sure your CPA and your attorney are working from the same playbook, reach out through blgattorney.com or call my Oklahoma City office.