Tax law at the individual level Forum

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Tax law at the individual level

Post by powerfail » Sun Apr 14, 2024 5:53 pm

What does practicing tax law look like if you are at a small firm or solo practice and serving individuals and small businesses? (I know that there are tax attorneys both in BigLaw and in-house at companies, which is different.) At the individual level, what is the difference between what a CPA can do and what a tax attorney can do? Also, how feasible is it to combine tax law with other areas of small-firm practice (e.g., employment law, immigration law, criminal defense)?

Part of what draws me to tax law is that it seems more objective and “mathy” than other areas. Is that a fair assessment?

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Re: Tax law at the individual level

Post by nealric » Thu Apr 18, 2024 12:18 pm

I am a tax attorney.

Most tax law at the individual and small business level is tax controversy. Individuals and small business have few planning opportunities that demand the resources of an attorney (other than high net worth individuals with international footprints, complex businesses, or estate planning issues). If you really wanted to do planning work for individuals, you'd probably need to be more of a Trust and Estates/Edler Law practitioner with a tax planning adjunct.

Most tax controversies at the individual and small business level are collections-related or related to factual support for a position (i.e. small businesses that don't have adequate records to support their expenses). There aren't a ton of tax attorneys that get by on small business and individual work because those customers tend to go to cheaper practitioners for their needs (i.e. CPAs or enrolled agents). If you see TV ads/billboards asking if you owe money to the IRS, those are usually "offer in compromise" mills, where they churn out forms offering the IRS less money than the tax owed due to inability to pay. That could be run by an attorney, but a lot of those are run by enrolled agents. It's a volume game without a lot of real "law" being done. There are some attorneys that make a living taking individual cases to tax court, but it's relatively rare for an individual or small business to have a case that has merit and is worth enough to justify an attorney's billing rate.

In terms of what a tax attorney can do vs a CPA, there's nothing an attorney can't do in the tax space in terms of licensure. One thing a tax attorney can offer is the ability to file a refund suit in district court or the court of federal claims (a CPA or Enrolled Agent cannot do that). However, a CPA is probably going to be much better at compliance given that their training is on the accounting side.

Tax law isn't really more objective than other areas of law. In fact, a tax attorney typically gets involved precisely because there is an area of uncertainty. It's a bit more mathy in that there is a direct quantitative nexus and it's more of a code-based area of law, but you are better off getting a Masters in Accounting and getting your CPA if you primarily want to work with numbers all day and just want to get to the "correct" answer rather than playing with uncertainty.

Long story short, most tax attorneys primarily work with larger businesses. It's a field that is mostly biglaw/in-house, with a few boutiques and very few solos. The tax attorneys who do individual work usually work with high net worth individuals who derive wealth from complex business arrangements.

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