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If anyone has been reading my unearned income issue with the IRS, they see that littleadv is telling me to use a professional to help me sort out my issue. As thick as I may be, it's finally sinking into my head that after calling the IRS multiple numbers over a span of two weeks and speaking with anyone who answers the phone which is rare that a human answers the phone and it's usually someone who is in the wrong department and can not help me despite being courteous and understanding, I might need to pay someone to get this resolved.

The question is, when does one contact a CPA and when to pay more (I think) for a Tax attorney? What are the guidelines and which apply in my case? Also, I read that the IRS also accepts some sort of certified rep of some kind, would that work for me or do I just go for one of the former?

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    A big enough CPA firm will have tax attorneys on hand. If you don't plan on doing this yourself, highly suggest you start calling firms in your area immediately and ask to speak to someone in their 'tax controversy' group. Sep 28, 2022 at 17:58

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As mentioned in the comments, any tax professional will tell you what specific representation is required.

I'll list the different types available. Note: this is for US only, in other countries this may be different.

Tax Preparer Tax preparers are registered with the IRS, and in some States with the State. They do not have any designation or license in most cases, and are only allowed to:

  • Prepare tax returns for their clients.

CPA

Certified Public Accountants are accountants who go through specific set of exams to get a CPA designation from their respective State. They may only practice in the State that gave them the designation. In taxes area CPAs may:

  • give tax advice and tax planning,
  • prepare tax returns,
  • represent their clients before the IRS or the State tax authorities

EA

Enrolled Agents are professionals who went through a specific set of exams administered by the IRS and are enrolled to act as their clients' agents. The term is a bit dated, but basically it is a Federally regulated tax adviser. Their license is issued by the Federal Government (the IRS), and AFAIK this is the only license to practice issued by the Federal government (every other profession is regulated by States). Enrolled Agents work exclusively in tax area, they are not accountants. They may:

  • give tax advice and tax planning,
  • prepare tax returns,
  • represent their clients before the IRS or the State authorities,
  • with additional certification they may represent their clients before the Tax Court.

Many retired IRS agents become Enrolled Agents as they can get their license by virtue of their experience with the IRS instead of going through the standard certification process.

Attorneys

Attorneys are legal professionals who are licensed to practice law by their State. They may practice only in the State that licensed them. They may practice any area of the law, but most specialize in some areas - for example tax attorneys. Attorneys may:

  • give tax advice and tax planning,
  • prepare tax returns,
  • represent their clients before the IRS or the State tax authorities,
  • represent their clients before the State courts of their State,
  • with additional certification they may represent their clients before the Tax Court
  • with additional certification they may represent their clients before the Federal courts where they're certified (some may only represent in their local District courts, others are certified all the way to SCOTUS).

Most people would only hire an attorney if they need to go to court. Even for Tax Court you may be OK with an EA representing you (if that EA is admitted to the bar of the Tax Court).

Generally you'll start with hiring a CPA or EA, and they will evaluate your case and suggest looking for an attorney, if needed. Most will have an attorney they already routinely work with.

Who else can represent

If you live outside the US the regulations are a bit more relaxed and you can have anyone represent you. See the IRS Publication 947. Usually that would be a local CPA or tax adviser who's proficient enough in the US taxes and regulations. If you need to go to court (including the Tax Court), you'll still need a US-licensed professional admitted to the court bar (an attorney, or in case of the Tax Court may also be an EA admitted to the bar).

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