Do I need a tax attorney or a CPA in California?

It depends on the risk. CPAs and enrolled agents prepare returns and can represent taxpayers in audits, but only the attorney-client privilege fully protects communications; the practitioner privilege of 26 U.S.C. § 7525 does not cover criminal matters. When fraud exposure, litigation, or large disputed amounts appear, an attorney belongs in the picture.

The professions divide by function. CPAs and enrolled agents handle return preparation, accounting, and routine examinations, and can represent taxpayers before the IRS and FTB. Attorneys take over where controversy and risk concentrate: appeals strategy, Tax Court petitions and refund litigation, collection defense, and any matter with potential fraud exposure. The dividing line is privilege. Communications with a CPA carry only the limited protection of 26 U.S.C. § 7525, which applies in noncriminal federal tax proceedings and does not shield communications once a matter turns criminal; return preparation work is generally not privileged at all. Attorney-client privilege is broader, and in sensitive cases the attorney can engage the accountant under a Kovel arrangement so the accounting analysis happens within the privilege. Many matters use both professionals: the CPA on the numbers, the attorney on strategy and communications with the government. In an audit that could reveal understatement or unfiled years, involving an attorney before responding preserves options that are hard to recover later.

Authority: 26 U.S.C. § 7525