Tax law is a remarkably interesting practice areas due to its ever-changing and highly personal nature. A person may face tax consequences if he sells stock, takes out a loan, purchases life insurance, forms a business, undertakes improvements to his home, gives his grandchildren a gift, makes a charitable donation, creates a will, or does any number of other things. A business or organization's tax obligations will vary depending upon its form, the quality and quantity of its assets, and the structure of its transactions.
Tax attorneys may work on cases involving the taxation of corporations, partnerships, and charitable organizations, pensions and retirement plans, social security benefits, estates, trusts, gifts, bonds, and more. Some may encounter international tax issues.
In general, tax attorneys use investments, trusts, gifts, and other tax planning devices to reduce their clients' income and estate tax obligations. They may also represent their clients in judicial or administrative proceedings relating to tax obligations. For most attorneys who deal with tax on a regular basis, their practice is driven by the federal Internal Revenue Code (IRC) and state tax codes, along with regulations, revenue rulings, and case law. Tax attorneys spend their time researching the impact of tax provisions, drafting and reviewing legal documents, writing letters and memorandums, reviewing files, advising clients, and conferring with other professionals, such as accountants, stockbrokers, business advisers, insurance agents, and representatives of financial institutions. The majority of tax attorneys do not prepare tax forms; that task is typically handled by their clients' accountants.
Tax attorneys advise clients on ways to minimize their tax liability during their lifetimes and to prevent problems related to taxation. They help clients comply with tax regulations, navigate audits, contest tax assessments, or reduce fees and penalties associated with the payment of taxes. Often, their work involves negotiating with the Internal Revenue Service (IRS) or state tax authorities. Even though much tax work is transactional, some attorneys specialize in tax litigation. These attorneys focus their practice on the representation of clients in front of the U.S. Tax Court, state tax courts, and other courts, including those of administrative agencies. Tax attorneys' clients are often businesses and organizations (including corporations, banks, start-up companies, small businesses, and non-profits), but a good number of tax attorneys advise individuals as well. Often, individuals who seek the advice of a tax attorney have considerable wealth.
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Tax law attorneys must take steps to keep up with changes in tax law, which occur regularly and can dramatically affect the tax implications of their clients' actions. Given the technical nature of federal and state tax codes, an attention to detail is key to the success of every good tax law attorney. It is also important for attorneys who handle tax matters to be able to explain complicated tax concepts in relatively simple terms so that their clients can understand what they need to do to minimize their tax burdens and why.
Additionally, some tax law attorneys find it is helpful to have a background in business, since many represent businesses or individuals who own businesses. It is also helpful for attorneys in this area to be familiar with accounting principles. In fact, a significant number of attorneys who handle tax matters are also certified public accountants (CPAs).
Skills often found in tax lawyers:
Participating in any of the below-listed activities will not only offer you valuable insight into tax and estate planning law practice, but will put you at a competitive advantage in your post-graduate job search.
Tax attorneys work at law firms of all sizes, for federal and state government agencies, and as in-house counsel for private corporations and other organizations. Large and mid-size law firms with business clients usually include a few lawyers with expertise in tax and/or employee benefits. Some have a separate division to handle tax matters. Boutique law firms often specialize in narrow areas of tax law, such as tax litigation or helping non-profit organizations comply with the elaborate requirements for maintaining tax-exempt status. In-house counsel and other tax attorneys who represent business associations analyze the tax consequences of their clients' transactions, from securities offerings and profit distributions to the structuring of employee retirement plans and mergers.
Consulting and accounting firms tend to focus on tax planning, controversy, financial disclosures, and the preparation of tax returns. In some situations, people who are licensed as attorneys may work in accounting or consulting firms rather than practicing law. Tax attorneys also may work in private corporations and banks, as in-house counsel. They can also be found in the federal government (e.g., the Internal Revenue Service, the Department of Justice, Tax Division, which handles criminal prosecution for evasion of federal taxes, or the Pension Benefit Guaranty Corporation, which is a federal government agency) or the state or local government (e.g., the California Franchise Tax Board or the California State Board of Equalization). Some non-profit law firms hire attorneys who provide legal counsel to, or advocate on behalf of, low-income tax payers. Other non-profit organizations have in-house legal counsel to handle their tax matters.
Tax attorneys usually represent business entities — including corporations, banks, non-profits organizations, small businesses, and start-up companies — but may also represent individuals.