Do I Need a Tax Attorney or a Locum Tenens CPA?
Half of a physician forum says lawyer, the other half says any CPA will do. Both halves are answering the wrong question. The right question is: what job needs doing?
A guide by Taxstra Tax & Accounting · CPA-led tax strategy for business owners
Written by Bryan Martin, CPA, Managing Partner and Founder of Taxstra. Last updated August 18, 2026.
The short answer
Hire by job, not by title. Tax attorneys handle controversies and legal risk: audits going adversarial, unfiled years, privilege-sensitive problems, litigation. CPAs handle planning and compliance: multi-state sourcing, quarterly systems, entity elections, retirement design, and the returns themselves. A high-earning physician with W-2 income plus multi-state locum work and an entity question has a planning problem, which means the answer is a CPA, specifically one whose practice is full of locums, because the multi-state layer is where generalists quietly leave money and filings on the table.
A fact pattern worth walking through
Take a composite we see constantly: a physician earning around $250K W-2 at a home hospital, another $250K of 1099 locum work spread across five states, an LLC formed in yet another state on a colleague’s advice, no estimates going to three of the work states, and a vague plan to "S-corp it" someday. The forum answer to this person was "you need a tax attorney." Look at the actual task list:
- Nonresident returns and day-count allocations in each work state, plus the resident credit math: sourcing work
- A per-state estimate schedule so the next notice never arrives: quarterly system design
- A decision on whether that out-of-state LLC should exist at all, and whether an S-corp election clears its break-even at this profit level: entity math, including the state-sourcing reality check
- Solo 401(k) design against the W-2 plan, health coverage, and deduction hygiene on $250K of Schedule C income
Not one item on that list is legal work. It is all planning and compliance, executed hundreds of times a year by a firm that specializes in it. The attorney enters this story only if a state has already assessed and appeals are failing, or there are unfiled years with real exposure. Cleaning up a few missed nonresident returns proactively, before notices, is standard CPA remediation work.
The dividing line, drawn precisely
| Situation | Right professional | Why |
|---|---|---|
| Multi-state locum income, planning and filings | Locum-specialized CPA | Sourcing, credits, and estimates are their daily work |
| Entity choice and S-corp election timing | CPA (attorney only for partner agreements) | It is a math decision with compliance consequences |
| IRS or state audit, routine documentation stage | CPA representation | Most exams resolve on records and correspondence |
| Audit escalating to appeals or Tax Court | Tax attorney, alongside the CPA | Litigation posture and privilege now matter |
| Years of unfiled returns, large balances, any fraud anxiety | Tax attorney first | Privilege protects the conversation while strategy forms |
| Asset protection structuring beyond malpractice coverage | Attorney, with CPA input | Legal instruments, tax side effects |
The screening question that sorts CPAs in one sentence
It also helps to know what the engagement itself should look like once you pick the lane, because "hire a locum CPA" describes two very different products. The compliance product files what happened: returns in every required state, prepared from whatever records survived the year. The planning product shapes what happens: an entity decision made against your actual contract mix, an estimate calendar built per state in January, retirement contributions designed rather than defaulted, stipend and travel structures reviewed before contracts are signed, and a year-end session while the year is still movable. Multi-state locums at meaningful income levels almost always need the second product, and the tell that you are buying the first while paying for the second is silence between filing seasons. Whatever firm you choose, ours included, the calendar of touchpoints belongs in the engagement letter where you can hold it accountable.
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Frequently Asked Questions
When does a physician actually need a tax attorney?
When the problem is legal, not computational: an audit heading toward appeals or Tax Court, criminal exposure, unfiled years with big balances, complex asset protection, or a dispute where attorney-client privilege matters. Attorneys defend positions and litigate. For planning, entity decisions, multi-state filings, and quarterly strategy, a CPA who lives in that work is the right hire.
What does a locum-specialized CPA do that a general CPA does not?
The multi-state layer is the difference. A locum CPA handles nonresident sourcing and day-count allocations, per-state estimate schedules, resident-state credits, S-corp timing against your assignment mix, retirement stacking on 1099 income, and agency vs direct contract tax mechanics, weekly, across many clients. A generalist sees this fact pattern occasionally and prices it accordingly, in both fees and mistakes.
I have a W-2 hospital job plus six figures of locum income in several states. Who do I hire?
A CPA firm with real locum volume, full stop. That fact pattern has no legal controversy in it; it has sourcing, estimates, entity math, and retirement design. If a controversy ever develops, a good CPA firm will tell you the moment a lawyer should enter the room.
Do I need a lawyer to set up my LLC or S-corp?
State formation filings are simple, and the tax election that matters (Form 2553) is CPA territory. Where a business attorney earns their fee is contract review, operating agreements with partners, and liability questions specific to your situation. For the standard single-owner locum entity, the expensive part to get right is the tax side: whether to elect at all, when, and what salary to run.
What should I bring to a first conversation with a locum CPA?
Last year’s return, a list of states you worked or plan to work with approximate days and income in each, your agency or direct contracts, what entity exists if any, and your retirement accounts. With those five items, a specialist can usually spot the material issues, missed sourcing, estimate gaps, entity timing, retirement space, inside the first meeting.
Can a CPA represent me in an IRS or state audit, or is that lawyer territory?
CPAs and enrolled agents hold full practice rights before the IRS: they can represent you through examination and appeals, respond to document requests, and negotiate resolutions. Most exams live and die at those stages. The attorney becomes necessary when litigation is realistic or criminal exposure exists, and a good CPA firm names that moment out loud rather than riding past it.
What is attorney-client privilege worth in a tax matter?
In routine planning and compliance, little, because the facts end up on returns anyway. In matters with fraud exposure or unfiled years, a great deal: conversations with an attorney are privileged in ways accountant communications are not, and attorneys sometimes engage the accountant under a Kovel arrangement to extend protection over the numbers work. If privilege is even a question in your situation, that itself is the sign to start with counsel.
Do I ever need the CPA and the attorney at the same time?
In controversies that escalate, yes, and the division of labor is natural: the attorney owns strategy, privilege, and the legal forum; the CPA rebuilds the returns, runs the numbers, and often keeps handling the go-forward compliance so the problem never regrows. What you should not pay for is two professionals doing the same planning work in parallel.
Related Locum Tenens Tax Questions
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This page is educational, not individualized tax advice. Locum tenens tax outcomes depend on your contracts, your states, and your numbers. Savings vary by client and results are not typical of every situation. Consult a qualified tax professional before acting on anything here.