What Is Tax Law?
Tax law encompasses federal, state, and local taxation, including business taxes, capital gains, employment and payroll, estate taxes, gifts, income taxes, and property taxes. The federal government collects income taxes (as do some states) and social security taxes. States assess administrative fees for such things as vehicle registration and drivers’ licenses. Local taxes include those on real property, sales, and city and county services.
Staying up-to-date with and interpreting the changing federal tax code constitutes a large part of the tax law profession, along with understanding the interplay between federal, state, and local laws.
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Civil and administrative procedure makes up an important part of tax law, as well, because tax disputes take place in various courts. The U.S. Tax Court hears federal tax cases, while state and local tax issues may be adjudicated in state civil, criminal, or tax court or by an administrative tribunal.
This page describes the role of tax attorneys and the qualifications needed to become one. It also addresses career options and resources for tax law professionals.
What Is a Tax Attorney?
Tax attorneys help their clients navigate and comply with the complex system of tax codes and legally take advantage of the myriad deductions, credits, and exemptions. They also represent clients in tax disputes. Tax lawyers in private practice assist both individuals and businesses. They may also serve as corporate in-house counsel or work in the government.
Some corporations hire tax lawyers on an as-needed, contract basis when tax issues arise. Estate planning, real property, and employment attorneys often encounter tax issues at some point in their practice and may seek advice from a tax attorney.
What Does a Tax Attorney Do?
What is their focus?
Tax attorneys focus on guiding clients through various taxation laws and assisting them with disputes. They may provide proactive advice to corporations on an ongoing basis, or they may only represent clients facing audits or legal proceedings. Attorneys also advise clients with regard to setting up estate plans and making monetary gifts. Some represent clients in criminal cases, such as tax evasion or fraud.
What skills do they need?
Required skills include a solid understanding of accounting and mathematical principles, as well as the ability to communicate and clearly explain complicated tax laws to clients. These professionals also rely on critical thinking skills, the ability to analyze tax law to help clients make sound decisions, and legal research skills to stay current on changing tax laws.
Tax attorneys acquire many of these skills in law school, which teaches students to think like lawyers, synthesize complicated legal documents, and express themselves orally and in writing. Students entering law school with a bachelor’s degree or significant coursework/work experience in accounting, business, or math often pursue careers in tax law.
Who do they work for?
Corporations hire tax attorneys either on contract or as in-house counsel. Large companies may employ tax attorneys full time to get advise on the legality of commercial transactions, legislative developments, impacts of financial decisions, and employment and payroll issues. Big law firms often house a tax group with attorneys whom businesses hire to tackle issues such as forming a corporation or nonprofit, bankruptcy, joint ventures, and corporate restructuring.
Smaller firms and attorneys in private practice may assist individuals or small businesses with audits, tax disputes, property tax appeals, investments, and setting up trusts. Some attorneys work in estate law, helping clients structure their wills and trusts to maximize tax advantages.
Litigators practice in the U.S. Tax Court, state tax tribunals, and local administrative proceedings. Government tax lawyers work for the IRS or state and local agencies.
How do they do their work?
Tax attorneys conduct legal research using computer databases. They read extensive material regarding tax law changes and negotiate with the IRS and other tax authorities. These professionals meet with clients to analyze evidence such as bank statements, tax documents, receipts, payroll records, and invoices. They draft letters, memoranda, and contracts; participate in conference calls and meetings; and make presentations.
What are some job titles they might have?
Job titles for these professionals may include tax associate, business and tax attorney, corporate tax attorney, transactional tax attorney, criminal tax attorney, real estate tax attorney, tax controversy and dispute resolution attorney, international tax attorney, and estate planning attorney.
What are some specialties in this field?
Specialities in tax law include:
||Attorneys ensure compliance with tax laws, rules, and regulations. They give advice on corporate governance, mergers and acquisitions, and other business and securities matters.
||Lawyers provide advice and counsel on state and federal regulations, benefits, and pensions. They draft policies and provisions in employment agreements and serve as subject matter experts on executive compensation taxation matters.
||Practitioners advise tax-exempt, nonprofit organizations, such as business and trade associations, educational institutions, healthcare organizations, public charities, homeowners associations, and social service providers.
|INTERNATIONAL TAX PLANNING
||Specialists provide counsel regarding tax issues relevant to companies engaged in global business activities, as well as individuals working or retiring in foreign countries.
||These tax lawyers help local governments with issues such as tax compliance with regard to capital projects, infrastructure, transportation, housing, school districts, and industrial revenue and economic development bonds.
||Trial lawyers handle cases in federal and state tax courts. They also negotiate with the IRS, provide defense in criminal tax prosecutions, and represent clients in disputes with taxing authorities.
What Are the Responsibilities of a Tax Attorney?
Tax law touches a variety of legal areas, but common duties and responsibilities include:
Business Purchase and Sale
Lawyers advise on capital gains, depreciation, sales tax, and stock purchases. They investigate the value of a business along with the seller’s finances, debts and liabilities, and assets, determining how to structure the purchase and sale. They also draft tax-related contract provisions and handle potential state audits and tax clearance issues.
Attorneys help clients select a business entity type, such as a C-Corp, S-Corp, or limited liability company. They advise on tax advantages and disadvantages; draft business formation documents, such as articles of incorporation; and complete forms to file with the state and the IRS. These professionals also draft LLC agreements and corporate bylaws and assist clients in transferring business assets to LLCs or corporations.
Practitioners advise clients on the best vehicles to pass wealth to their heirs through wills and trusts. They provide guidance on the types of trusts and trust provisions that maximize tax savings, and they alert clients about changes to federal and state estate tax laws. Estate planners assist clients with transferring estate assets into trusts.
Specialists formulate and implement plans of action to deal with issues including audits, back taxes owed, mistakes in tax amounts owed, and tax evasion. They draft letters to the IRS, adhere to imposed deadlines, negotiate resolutions and settlements with the IRS, and represent clients in federal court.
Property Tax Appeals
Attorneys dealing with these issues review client documents — including letters from local governments with assessed values and legal descriptions — for accuracy. They research comparable properties’ tax assessments and possible exemptions, and they arrange for property appraisal. These professionals request reviews from the local assessor’s office and advise clients on their best course of action. They may also file appeals with the assessor and represent clients at hearings.
Tax lawyers review legislative updates, IRS rule changes, and recent case law to stay current on changes in tax law. They read, synthesize, and analyze the federal tax code — along with other other tax laws — to ensure client compliance.
What Qualifications Do You Need to Become a Tax Attorney?
- Earn a bachelor’s degree, preferably in accounting, business, or mathematics.
- Pass the Law School Admission Test to gain admission into law school.
- Earn a juris doctor degree from a law school accredited by the American Bar Association that has a focus on tax law.
- Obtain an internship or summer associate position to acquire practical skills.
- Pass the state bar exam to obtain a license to practice law.
- Become certified by the local state’s board or earn a master of laws in tax law; while not generally required, this can help increase job opportunities and salary potential.
- Opt to pursue a concurrent degree in tax law and an MBA.
- Test to become an enrolled agent with the IRS; successful test takers can represent taxpayer clients before the IRS .
- Earn continuing legal education credits to maintain a license to practice and stay up-to-date on current laws.
- Accounting and math to understand and assess tax implications.
- An understanding of business principles and how corporations function.
- Critical thinking and analysis to apply the correct legal principles to client issues and provide alternate strategies.
- Interpersonal skills to inspire client trust and confidence.
- Oral and written communication skills that clearly explain complex tax rules and case law to clients, helping them make decisions.
- Conducting thorough, accurate, and applicable research in a timely manner.
- Learning new computer programs and various legal databases.
- Maintaining professionalism and remaining calm in pressure-filled, stressful situations.
- Solving problems in an objective, unemotional, and unbiased fashion.
- Federal tax code and IRS regulations, as well as any changes made through legislation, rule-making, and adjudication.
- State and local tax laws and the interplay between them and federal law.
- Negotiating favorable outcomes for clients with the IRS when disputes arise or clients undergo audits.
- Vehicles, such as trusts and LLCs, that minimize client tax liability, as well as how to structure these to meet clients’ goals and needs.
How Are Tax Attorneys Employed?
- Tax attorneys work as part of a legal department, collaborating with other in-house counsel, company officers, and board members to serve their corporate clients on an ongoing basis.
- Law Firms
- Attorneys belong to a firm’s tax group and work together to assist higher-income individuals, corporations, and businesses with a variety of tax issues as they arise.
- Private Practice
- Tax attorneys may form small firms or partnerships with other attorneys. Alternatively, they can work on their own as solo practitioners to help individuals and small business owners with tax issues, such as property taxes, estate planning, and payroll.
- Litigation Firms or Practices
- Litigators represent clients in federal, state, and/or local tax courts and tribunals as trained trial lawyers with specialized knowledge of tax litigation.
- Government Agencies
- Tax lawyers work for the IRS or state and local governments and agencies that handle taxation. These workers represent government interests.
Learn More About Tax Attorneys and Take the First Step Today
Professional Organizations for Tax Attorneys
- American Bar Association – Section of Taxation
Members from across the country can attend meetings and conferences to discuss current issues and pending legislation. They also network and hear from speakers about a variety of tax topics. This section of ABA also offers continuing education options, tax podcasts, and advocacy opportunities.
- National Association of Tax Professionals
New and experienced tax professionals — including tax attorneys — can join this association to gain access to guidance on federal tax code updates, networking opportunities, education courses, an online tax library, and advocacy.
- National Society of Tax Professionals
This organization provides its members with a tax research service, federal tax alert, continuing education opportunities, professional liability insurance, a newsletter, and emails on current issues.
- Tax Policy Center
A clearinghouse of tax topics, this website offers research and commentary, statistics, information on current and proposed laws, a blog, newsletters, and model estimates for tax attorneys and other professionals.
- TaxProf Blog
This online source offers legal blogs edited by tax law professors, deans, and lawyers, as well as a comprehensive list of worldwide tax organizations, policy groups, grant opportunities, books, student resources, and state and federal tax law links.