The advice below is from Cynthia Blum, Professor of Law and Robert E. Knowlton Scholar; Co-Director, Federal Tax Law Clinic
What do tax lawyers do?
Tax lawyers practice in a number of settings: in large or small law firms, in accounting firms, in legal departments of corporations, non-profits, or in the IRS or in state tax departments.
A primary role for tax lawyers is tax planning. Tax lawyers advise clients how best to structure transactions to achieve the most favorable tax result possible. This advice is of great importance to clients contemplating a variety of transactions: forming a new business entity or an investment fund, conducting a real estate transaction, engaging in a corporate merger, acquisition or spinoff, entering into a divorce settlement, providing employee benefits such as pensions or executive compensation, creating an estate plan, or obtaining tax exemption for a non-profit. Tax lawyers may also monitor ongoing transactions to ensure appropriate execution and to warn of new tax developments.
Another important role for tax lawyers is to advise clients regarding positions that they may claim on a tax return and the likelihood of the position prevailing in litigation. Clients often rely on these opinions to avoid IRS penalties. In some cases, such a merger, the execution of the transaction depends upon receipt of a favorable tax opinion. Tax lawyers also prepare requests for an advance ruling by the IRS regarding a planned transaction.
Tax lawyers are also called if the IRS (or a state tax authority) challenges a position on a taxpayer’s return. Tax lawyers may negotiate a settlement with the IRS appeals officer or counsel, and, if no settlement can be reached, may represent taxpayers in U.S. Tax Court, state tax court, or other courts. Tax lawyers may also negotiate with the IRS to obtain a reduced tax (through an offer in compromise) for a client who is not in a position to pay the tax due. A few tax lawyers defend taxpayers who are being criminally prosecuted for tax evasion. Tax lawyers who work for the IRS or state tax authorities represent the government in tax controversies and may provide advice to other tax officials. Tax lawyers newly hired by the IRS appear in Tax Court frequently.
The tax law is extremely complicated and also is subject to frequent changes. Tax lawyers spend a good deal of their time conducting research. Tax lawyers must closely monitor tax law developments, including court opinions, IRS rulings, Treasury Regulations, and legislation. Tax lawyers often continue their education with a one-year full-time LLM program in taxation or with a part-time LLM program attended in the evening. Some tax lawyers, especially in large law firms or accounting firms, may develop a particular field of expertise such as state and local taxation, international taxation, or tax litigation. For all tax lawyers, it is increasingly important to understand the international tax aspects of a transaction, including the application of bilateral tax treaties.
What classes should I take?
The foundational course is Federal Income Tax, a 4-credit enterprise, which covers the basic operation and structure of the federal income tax. This course is a prerequisite for advanced courses, including corporate taxation, partnership taxation and international taxation. The law school also offers a course in state and local taxation. If you seek to enter tax practice, you should take at least one of the advanced courses and eventually may need to obtain knowledge in each of these subjects. It is also very worthwhile to enroll in the Federal Tax Clinic. In the Clinic, you will become familiar with tax procedure, including the operation of the Internal Revenue, and also ethical standards specific to tax practice. You will represent low-income taxpayers in controversies before the IRS and prepare offers in compromise. Students in the Tax Clinic attend a session of the U.S. Tax Court calendar in NYC and conduct a mock Tax Court trial. Tax law practitioners often participate in clinic seminars.
Because tax lawyers are often involved with planning business tranactions, you should also take the course in Business Associations. It may also be useful to take Estate Planning, Family Law, Accounting and the Law, and Real Estate Transactions to develop familiarity with non-tax aspects in these fields of practice.
How can I learn more?
Students have access to a variety of tax law sources in the Rutgers Library. The library has many valuable electronic tax resources, in addition to Lexis and Westlaw. Students have access to the CCH tax service through Intelliconnect, as well as to BNA’s Tax and Accounting Center, and RIA’s Checkpoint. Lexis provides access to materials offered by Tax Analysts, including the weekly Tax Notes magazine. Westlaw provides access to some essential tax law treatises.
During law school, students may obtain internships with the IRS counsel’s office or with state tax court judges. Many clerk for a state court judge after law school. Some students obtain an LLM in the year after law school before seeking employment. After doing so, they may be eligible to apply for a clerkship with the U.S. Tax Court in Washington, D.C.