There are a number of different types of Tax Representatives
It is very important to match the right TaxRep to the right tax problem. So review the following with just thought to what is right for you.
A TaxRep can come from any one of the following areas.
- A Lawyer
- An Accountant
- A Tax Consultant
- An Expert Witness
The practice of law is very broad and you need a specialist in Tax Litigation. If you pick a Lawyer as a TaxRep, it could be your best choice, depending on your situation. If your situation is one where you know your activities involve a criminal element, and the Lawyer is a litigator, who is fully abreast of CRA procedures, then this is where you need to lean. It is normally the most expensive option. A tax litigation Lawyer is your best bet for client material privilege as well as client-solicitor privilege. Privilege is normally not of particular concern if you are not likely going to court.
Accounting is also a broad field, and you will require an accountant who is familiar with Taxes. Not all accountants specialize in taxation. If you are not engaged in a criminal activity, and you just need to get your tax returns caught up, a licensed accountant is a good idea. The chances of you getting audited are low if a licensed accountant does your tax returns. Accountant’s licenses are vulnerable, so they tend to be very conservative in their approach to doing tax returns. As a result a good accountant’s work will reduce your chances of being audited. If you are audited any good accountant can easily explain how they came up with the numbers on your tax returns. Accountants are normally considerably less expensive than Lawyers. However accountants have a monkey on their back when it comes to fighting with CRA. If you are in for a fight, an accountant may not be your best bet.
Tax Consultants can be any combination of 1, 2 and 4. With Tax Consultants you need to be especially concerned with their experience and track record. The concern is that the consultant may not have any credentials. On the other hand credentials without experience is not a good choice either. An interesting tax perspective is that they also can be more aggressive in dealing with CRA, because they don’t have a license to lose. You need to make sure that you know that the consultant deals with CRA on a daily basis and has been doing so for a long time.
In our case we often retain or work together with lawyers to achieve the best results for our clients. This includes having the right lawyer write a legal opinion on the matter.
An Expert Witness, can be any combination of 1,2 or 3. An expert witness can be hired to present the material you have in court. What this means is that if you decide to defend yourself in General procedures in tax court, you can rely on your Expert Witness to testify as to the reasons, evidence, tax laws and cases relied on. While this is not as good as hiring a Lawyer it is an excellent option if you simply cannot afford a Lawyer. Your Expert Witness can also act as a Material Witness. This would apply when they are involved in the actual activities surrounding your tax problems. Lawyers often bring in such witnesses to support their case… Usually it would be as a Material Witness, however if an inexperienced Lawyer wanted to enhance their case, they too would bring in the Expert Witness.
Depending on your particular situation will dictate which is your better choice.