Cecily Zamora
Tax law is a complex area that impacts individuals and businesses alike. While it is not necessary to understand all the intricacies of tax law when preparing tax returns, it is beneficial to seek guidance from professionals who specialize in this field. These professionals include tax attorneys, CPAs (Certified Public Accountants), EAs (Enrolled Agents), and AFSP-certified individuals. They assist clients in various settings, from large law firms to government agencies, and help navigate the ever-changing landscape of tax laws and regulations. The Internal Revenue Code (IRC) serves as the foundation of federal tax law in the United States, with state governments having their own tax codes as well. Understanding tax law is crucial for effective tax planning, ensuring compliance, and optimizing tax advantages.
| Characteristics | Values |
|---|---|
| Tax law professionals | Tax attorneys, CPAs, EAs, AFSP-certified persons, Tax lawyers |
| Area of expertise | Corporate tax, international tax, partnership tax, tax litigation, state and local tax, personal tax, estate planning, tax-exempt organizations, and executive compensation |
| Practice settings | Large law firms, boutique tax firms, accounting firms, federal and state government agencies, corporations, tax courts |
| Clients | Individuals, public and private companies, governments, non-profits, educational and health care entities, private foundations, trade associations |
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Tax lawyers
For individuals, tax lawyers can provide guidance on personal tax planning, including the creation of tax-efficient structures and strategies. They can also assist with issues such as missed tax returns, tax debt, and allegations of tax fraud or evasion, helping to protect their clients' rights and minimise legal repercussions.
Businesses may engage tax lawyers to advise on matters such as corporate income tax, transactions and acquisitions, and the tax implications of economic activities. Tax lawyers in this context may be involved in analysing, creating and implementing complex transactions from a tax perspective, monitoring new and pending tax legislation, and advising on tax-efficient strategies.
In addition to their legal expertise, tax lawyers often have strong analytical and problem-solving skills, enabling them to interpret and apply tax laws effectively. They may also possess a thorough understanding of accounting principles and financial practices, which can be invaluable in providing comprehensive tax advice and ensuring compliance with regulatory requirements.
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Tax attorneys
The path to becoming a tax attorney typically involves several years of education and training. It often starts with obtaining a bachelor's degree in accounting or a related field, followed by attending an accredited law school where they specialize in taxation. Some tax attorneys may also pursue a master's degree in taxation or a Master of Laws (LL.M.) in Taxation to further enhance their expertise. After completing their legal education, aspiring tax attorneys need to pass the bar exam and obtain a license to practice law in their state or jurisdiction.
The work of tax attorneys can vary depending on their practice setting and area of specialization. They may be involved in analyzing and implementing complex transactions from a tax perspective, monitoring new and pending tax legislation, and explaining the consequences of tax laws to their clients. Additionally, tax attorneys can assist clients with IRS settlements, audits, and hearings, providing support during tax court proceedings. They act as advocates for their clients, ensuring they understand and navigate the complexities of the tax system effectively.
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Tax regulatory bodies
Internal Revenue Service (IRS)
The Internal Revenue Service is the federal agency responsible for enforcing tax laws in the United States. It administers and collects federal taxes and provides guidance to taxpayers. The IRS also offers resources such as the Interactive Tax Assistant (ITA), which helps individuals and businesses find answers to common tax questions.
Department of the Treasury
The Department of the Treasury plays a significant role in tax regulation. It works closely with the Office of Management and Budget (OMB) and the Office of Information and Regulatory Affairs (OIRA) to review and formulate tax regulatory policies and actions. The Treasury Department also provides tax treaty documents and technical explanations, offering insights into international tax agreements.
State Regulatory Tax Agencies
Each state in the United States has its own regulatory tax agency, similar to the IRS at the federal level. These agencies are responsible for passing state administrative regulations and rulings related to taxation. State courts also play a role by generating judicial opinions, although not all states have a dedicated tax court. State taxation often includes a variety of taxes unrelated to income, such as property taxes, sales taxes, and excise taxes.
American Institute of Certified Public Accountants (AICPA)
The AICPA is a professional organisation for certified public accountants (CPAs) in the United States. CPAs are licensed professionals who assist individuals and businesses with tax compliance and planning. While no single tax professional knows all the tax laws, CPAs are trained to research and interpret relevant tax laws based on their clients' information.
Tax Courts
Tax courts are judicial bodies that specialise in resolving disputes related to tax laws. Tax attorneys or tax lawyers may represent clients in these courts, providing expertise in specific areas such as corporate tax, international tax, partnership tax, and tax litigation. Tax attorneys can work in various settings, including law firms, accounting firms, and government agencies.
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Tax accountants
For individuals, tax accountants can assist with personal tax returns, offering advice on deductions, credits, and exemptions to ensure accurate filing and potentially maximise tax refunds. They can also provide guidance on retirement planning, investment strategies, and estate planning, all while ensuring compliance with relevant tax laws.
Businesses often engage tax accountants to help with tax compliance and strategic tax planning. These professionals can advise on business structure selection, tax registration, and understanding tax obligations specific to the industry. They can also assist with payroll tax, sales tax, and value-added tax (VAT) compliance, as well as provide insights on tax-efficient business strategies and identify tax savings opportunities.
While tax accountants have a strong understanding of tax laws and their practical application, they may collaborate with tax attorneys or tax lawyers for highly complex cases or specific areas of tax law. Tax attorneys often focus on areas such as corporate tax, international tax, partnership tax, tax litigation, and state and local tax (SALT). They provide legal advice, analyse and structure transactions from a tax perspective, and represent clients in tax disputes or litigation.
In summary, tax accountants are knowledgeable professionals who help individuals and businesses navigate the complexities of tax laws and regulations. They provide valuable guidance, ensure compliance, and help optimise tax obligations through careful planning and strategy. While they do not memorise every detail of the tax code, their expertise lies in applying relevant tax laws to their clients' unique circumstances.
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Tax law students
At NYU School of Law, for instance, students can take Corporate Tax I & II, which covers challenging "like-kind exchange" material. NYU also offers nearly 100 different sections of tax law courses, including the LL.M. program with courses such as Private Equity and Hedge Funds, Taxation & Transactions, and Corporate Income Tax Law.
Georgetown Law also offers over 35 courses and seminars through the LL.M. program, including Taxation & Transactions, Federal Taxation of Bankruptcy and Workouts, and Corporate Income Tax Law. Georgetown Law emphasizes that tax law impacts individuals for personal tax planning and business entities throughout their lifetimes, influencing everything from the formation of the entity to capital markets transactions and acquisitions.
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Frequently asked questions
Tax attorneys, CPAs, EAs, and AFSP-certified individuals can all help with your taxes.
Tax attorneys are lawyers who specialize in tax law. They are employed in a variety of settings, including large law firms, accounting firms, and corporations. They often focus on a specific area of tax law, such as corporate tax or international tax.
CPA stands for Certified Public Accountant. CPAs are licensed by state boards and can help individuals and businesses with their taxes. However, no CPA knows all the tax laws, and it is impossible to memorize the entire tax code. A good CPA knows how to take the information you provide and research the relevant tax laws.
