A big part of the tax law profession is keeping up with and comprehending the changing federal tax code, as well as knowing the interplay between federal, state, and municipal regulations. The civil and administrative process is also an important aspect of tax law, as tax issues are heard in a variety of courts. Federal tax cases are heard by the United States Tax Court, although state and municipal tax issues may be resolved in state civil, criminal, or tax court, or by an administrative body. This article explains the responsibilities of a tax attorney, the requirements for becoming one, and their salary structure. It also discusses tax lawyers’ or attorneys’ career alternatives and resources.
What Is Tax Law?
Tax law involves federal, state, and local taxation, including company taxes, capital gains taxes, employment and payroll taxes, estate taxes, gifts taxes, income taxes, and property taxes. The federal government (together with some states) collects income taxes and social security levies. Administrative fees are levied by states for services such as automobile registration and driver’s licenses. Local taxes include those levied on real estate, sales, and municipal and county services.
Who Is a Tax Attorney?
Tax attorneys assist clients in navigating and complying with the complicated system of tax rules, as well as legally taking advantage of the numerous deductions, credits, and exemptions. They also represent clients in tax controversies. Individuals and corporations are both served by tax lawyers in private practice. They may also act as in-house counsel for corporations or in government.
When tax concerns develop, some corporations retain tax lawyers on an as-needed, contract basis. Estate planning, real estate, and employment lawyers frequently meet tax concerns and may seek help from a tax attorney.
What a Tax Attorney Does
Tax attorneys are frequently employed by law companies or accounting businesses. Some may be sole practitioners, which means they run their own company and work for themselves.
A tax attorney is a lawyer who specializes in tax law. Tax attorneys assist individuals in organizing their money in order to optimize their tax situations, comply with tax rules, and resolve disputes with the IRS or other tax authorities. Some specialize in inheritance, foreign, or company taxes.
Tax lawyers in law firms typically assist clients on how to obtain favorable tax treatment in a variety of situations. They may prepare contracts or other legal documents as needed, and they may represent clients in tax court or elsewhere.
Tax lawyers at accounting and consulting businesses are more likely to assist clients in complying with tax requirements.
What Skills Does a Tax Attorney Need?
A good understanding of accounting and mathematical principles, as well as the ability to articulate and properly explain intricate tax regulations to clients, are all required talents. To stay current on changing tax rules, these professionals also rely on critical thinking skills, the capacity to interpret tax law, and legal research skills.
Many of these abilities are taught to tax attorneys at law school, where students learn to think like lawyers, synthesize difficult legal papers, and explain themselves orally and in writing. Students who enter law school with a bachelor’s degree or extensive coursework/work experience in accounting, business, or arithmetic are frequently drawn to jobs in tax law.
Who Employs a Tax Attorney
Corporations either hire tax attorneys on a contract basis or as in-house counsel. Large corporations may hire full-time tax attorneys to assist them on the legality of commercial transactions, legislative developments, the implications of financial decisions, and employment and payroll difficulties. Large law firms frequently include a tax group of attorneys that work with businesses on matters such as incorporating a company or nonprofit, bankruptcy, joint ventures, and corporate restructuring.
Smaller companies and private practice attorneys may assist individuals or small enterprises with audits, tax disputes, property tax appeals, investments, and trust formation. Some attorneys practice estate law, assisting clients in structuring their wills and trusts to optimize tax benefits.
Litigators work in the United States. Tax Court, state tax tribunals, and local administrative actions are also available. Government tax lawyers work for the Internal Revenue Service (IRS) or state and local governments.
How do Tax Attorneys go about their Work?
Using computer databases, tax attorneys perform legal research. They read a lot about tax law changes and negotiate with the IRS and other tax authorities. These experts visit with clients to examine evidence such as bank statements, tax returns, receipts, payroll records, and invoices. They write letters, memos, and contracts, as well as participate in conference calls and meetings and provide presentations.
What are Some of the Job Titles Tax Attorneys they Could Have?
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 are some of the job titles for these professions.
What are Some of the Specializations of a Tax Attorney?
Tax law specialties include:
#1. Corporate Tax
Attorneys ensure that tax laws, rules, and regulations are followed. They provide counsel on company governance, mergers and acquisitions, and other business and securities issues.
#2. Compensation For Executives
Lawyers advise and guide clients on state and federal regulations, benefits, and pension plans. They write policies and provisions for employment contracts and are subject matter experts on executive compensation taxation.
#3. Exempt Organization
Tax-exempt, nonprofit organizations such as business and trade associations, educational institutions, healthcare organizations, public charities, homeowners associations, and social service providers are advised by practitioners.
#4. International Tax Planning
Specialists advise organizations engaged in worldwide business activities, as well as individuals working or retiring in foreign countries, on tax difficulties.
#5. Municipal Finance
These tax lawyers assist local governments with tax compliance concerns pertaining to capital projects, infrastructure, transportation, housing, school districts, and industrial revenue and economic development bonds.
#6. Litigation Tax
Cases in federal and state tax courts are handled by trial lawyers. They also negotiate with the IRS, defend clients in criminal tax prosecutions, and represent clients in disputes with taxation authorities.
What are the Responsibilities Tax Attorney?
Tax law touches on a wide range of legal issues, but some common obligations and responsibilities are as follows:
#1. Business Purchases and Sales
Lawyers can help you with capital gains, depreciation, sales tax, and stock transactions. They look at the value of a company as well as the seller’s finances, debts and liabilities, and assets to determine how to organize the purchase and sale. In addition, they create tax-related contract conditions and handle potential state audits and tax clearance concerns.
#2. Business Formation
Attorneys advise clients on the best sort of business entity to form, such as a C-Corp, S-Corp, or limited liability company. They provide tax advice, create business formation paperwork such as articles of incorporation, and complete forms to be filed with the state and the IRS. These experts also create LLC agreements and corporate bylaws and help customers transfer business assets to LLCs or corporations.
#3. Estate Planning
Practitioners advise clients on the optimal vehicles for passing wealth to heirs, such as wills and trusts. They advise clients on the best forms of trusts and trust provisions to optimize tax savings, and they keep them up to date on changes in federal and state estate tax legislation. Estate planners help clients transfer assets from their estates into trusts.
#4. IRS Disputes
Specialists develop and carry out plans of action to deal with difficulties such as audits, back taxes owed, errors in tax amounts owed, and tax evasion. They create IRS letters, meet deadlines, negotiate agreements and settlements with the IRS, and represent clients in federal court.
#5. Property Tax Appeals
Attorneys who work on these cases double-check client documentation for accuracy, including letters from local governments with assessed valuations and legal specifications. They investigate comparable properties’ tax assessments and any exemptions, as well as arrange for property appraisal. These experts request assessments from the local assessor’s office and advise clients on the best course of action. In addition, they can submit appeals with the assessor and defend clients at hearings.
#6. Research
To stay current on changes in tax law, tax lawyers analyze legislative updates, IRS rule revisions, and recent case law. To assure customer compliance, they read, synthesize, and evaluate the federal tax code, as well as other tax legislation.
What Are the Requirements for Becoming a Tax Attorney?
#1. Education
- A bachelor’s degree, ideally in accounting, business, or mathematics, is required.
- To gain admission to law school, you must pass the Law School Admission Test.
- Earn a juris doctor degree from an American Bar Association-accredited law school with a tax law concentration.
- Obtain an internship or a summer associate position to gain actual experience.
- To practice law, you must pass the state bar exam.
- Earn a master of laws in tax law or become certified by the local state’s board; while not normally needed, this can significantly enhance work options and the tax attorney salary potential.
- Consider pursuing both a tax law degree and an MBA concurrently.
- Test to become an IRS enrolled agent; successful test takers can represent taxpayer clients in front of the IRS.
- Earn continuing legal education credits to keep your license and remain up to date on current laws.
#2. Skills
- Accounting and math are required to comprehend and estimate tax effects.
- A working knowledge of business principles and how corporations work.
- Critical thought and analysis are required to apply the relevant legal concepts to client situations and to propose alternative alternatives.
- Interpersonal ability to instill trust and confidence in clients.
- Oral and written communication abilities that help clients make decisions by properly explaining complicated tax rules and case law.
#3. Abilities
- Conducting extensive, accurate, and relevant research on time.
- Learning new computer programs and searching through numerous legal databases.
- Keeping a professional demeanor and being calm in high-pressure, stressful situations.
- Solving difficulties objectively, unemotionally, and impartially.
#4. Knowledge
- The federal tax code and IRS rules, as well as any changes brought about by legislation, rule-making, and adjudication.
- State and local tax laws, as well as the interactions between them and federal law
- When disagreements develop or customers are audited, we negotiate beneficial solutions for our clients with the IRS.
- Vehicles that limit client tax obligation, such as trusts and LLCs, as well as how to arrange these to match clients’ goals and needs.
How Does a Tax Attorney Get a Job?
#1. Corporations
Tax attorneys act as part of a legal department, engaging with other in-house counsel, company leaders, and board members to provide continuing service to their corporate customers.
#2. Law Offices
Attorneys in a firm’s tax department collaborate to help high-income individuals, corporations, and businesses with a wide range of tax concerns as they arise.
#3. Private Consultation
Tax attorneys may form small firms or partnerships with other attorneys. They can also work as solo practitioners, assisting individuals and small company owners with tax difficulties such as property taxes, estate planning, and payroll.
#4. Firms or Practices in Litigation
As skilled trial lawyers with a specific understanding of tax litigation, litigators represent clients in federal, state, and/or municipal tax courts and tribunals.
#5. Governmental Organizations
Tax lawyers work for the Internal Revenue Service (IRS) or for state and municipal governments and bodies that deal with taxation. These employees represent the government’s interests.
Tax Attorney Professional Organizations
#1. American Bar Association-Sectio of Taxation
Meetings and conferences can be attended by members from all around the country to address current concerns and upcoming legislation. They also have the opportunity to network and hear from lecturers on a variety of tax topics. This portion of the ABA also provides chances for continuing education, tax podcasts, and advocacy.
#2. National Association of Tax Professionals
This organization provides assistance on federal tax law modifications, networking opportunities, education courses, an online tax library, and advocacy to both new and seasoned tax professionals, including tax attorneys.
#3. National Society of Tax Professionals
This group offers its members a tax research service, a federal tax alert, continuing education options, professional liability insurance, a newsletter, and email updates on current concerns.
#4. Tax Policy Institute
This website, which serves as a clearinghouse for tax subjects, provides research and analysis, data, information on current and proposed laws, a blog, newsletters, and model estimates for tax attorneys and other professionals.
#5. TaxProf Blog
This website provides legal blogs published by tax law professors, deans, and lawyers, as well as a comprehensive list of international tax organizations, policy groups, grant possibilities, books, student resources, and state and federal tax law links.
What Is the Difference Between a Tax Attorney and a CPA?
Tax attorneys and CPAs are two distinct but related types of specialists who can assist you with taxes and financial planning. Learn what each one does and when you might need to call on them for assistance.
CPAs and tax attorneys are both uniquely skilled and trained specialists who can assist you with taxes and financial issues. Choosing who to hire is determined by your own combination of circumstances and the type of support you require. This page will help you comprehend these specialists’ training and knowledge, as well as how they can best assist you.
CPA Education
Accountants, bookkeepers, and other tax preparers are not obliged to get the same level of training, study, or testing as a certified public accountant (CPA). Individuals must finish 150 hours of undergraduate education to become a CPA, which is often 30 hours more than most bachelor’s degrees require. This frequently implies that CPA applicants must either finish five years of college courses, including at least 30 hours at the graduate level or obtain a master’s degree.
In addition to university education, CPAs in every state in the United States must pass all four portions of the CPA exam:
- Attestation and auditing
- Accounting and reporting on financial transactions
- Regulation
- Concepts and the business environment
The CPA exam is challenging and broad in scope, and applicants must pass all four parts of the exam within an 18-month timeframe.
In most states, CPAs must additionally work 1,800 hours under the supervision of a certified CPA. After that, they must continue their education with at least 120 hours of continuing education every three years.
A CPA designation is one of the most generally recognized and trusted professional qualifications in the corporate sector due to this significant training and understanding. A CPA must also follow the AICPA Code of Professional Conduct or risk having their license revoked.
Tax Attorney Education
To become a tax attorney, candidates must first complete a four-year bachelor’s degree program, often in mathematics, accounting, or business. Then, in order to be admitted to a law school, they must pass the Law School Admission Test (LSAT). The LSAT assesses legal-related skills such as reasoning, analysis, and reading comprehension. Even with a high LSAT score, law school applicants must frequently go through a lengthy and demanding admissions process in order to get admitted.
Law students acquire a Juris Doctor (J.D.) degree, which normally takes three years to complete. Tax attorneys must then pass their state’s bar exam in order to receive a state certification. Many tax attorneys go on to earn a master’s degree in tax law, which can take up to five years of study.
Furthermore, in order to maintain active bar membership in their respective states, licensed attorneys must complete continuing legal education. Each state bar organization establishes guidelines and criteria for individuals may market themselves as tax attorneys. Tax attorneys must follow laws and regulations or risk losing their license to practice law.
Choosing Between a Tax Attorney and a Certified Public Accountant
Your tax needs will determine whether you need to hire a CPA or a tax attorney. You should probably contact a CPA if you require assistance with the business and accounting aspects of taxes, such as:
- submitting tax returns
- Identifying all of the tax breaks and credits that you are eligible for
- Bookkeeping or financial document preparation
- Payroll administration
- Budgeting and financial planning advice
- Keeping abreast of tax reform or changes in tax law
- Buying, merging, or selling a company
- Obtaining a small business loan
- Choosing the Best Business Structure
- Determining whether to use cash or accrual accounting
- Developing strategies for financial risk management
- Being audited by the IRS
- Keeping an eye on funds to avoid fraud
CPAs can negotiate and represent taxpayers before the IRS or a revenue officer on the legal side of taxes. Furthermore, certain CPAs are uniquely equipped to assist with litigation and tax problems that must be decided in a U.S. court. Tax Court, so if you’re currently dealing with a CPA, inquire if the accountant is qualified to assist you with the specific legal challenges you’re facing. Of course, tax attorneys can assist with these legal difficulties as well. Some areas where a CPA or an attorney may be useful are:
- If you owe a significant amount of unpaid taxes,
- You are subject to liens or levies as a result of unpaid taxes,
- If you wish to stop wage garnishment.
- If you wish to bargain with the IRS
- You require assistance with trusts or estates.
So, if you require the following services, you should most likely consult with a tax attorney:
- Written legal advice
- Legal representation in court
Advantages of a Dual-certified Professional
While a tax attorney is normally used for more specialized and complex tax matters, and a CPA is typically used on a more frequent basis to keep your financial records in order and prepare your taxes, the benefits of having a two-in-one professional are difficult to overestimate.
Not only do dually-licensed Attorney-CPAs have the financial expertise to grasp the fine intricacies of your company’s balance sheets, but they can also advise on business structure to lower tax responsibilities and perhaps keep you out of IRS trouble.
However, if you ever find yourself in legal difficulty over your tax files, your dually-licensed Attorney-CPA will be well-equipped to represent you due to their knowledge of your company’s financial records and litigation expertise.
Furthermore, you may be able to save money in the long term by hiring a single professional who has the knowledge and expertise to advise on both significant business decisions while also doing the mundane responsibilities of keeping your finances flowing smoothly and ensuring your taxes are filed properly.
With the increased value of combining a tax attorney and a CPA into one expert, it’s simple to understand why small businesses might profit from hiring a dual-certified Attorney-CPA.
Tax Attorney Salary
Tax Attorney Median Salary
According to the BLS, the average annual salary of a tax attorney is $120,910. Salaries in the legal law range from $58,220 to $208,000 per year. Several criteria, such as a candidate’s work experience, degree, location, and certification, may influence earning potential.
According to PayScale, the starting salary for a tax attorney is roughly $80,000 per year. Attorneys’ earning potential may approach six figures as they gain experience and establish their talents. The table below shows the typical salary a tax attorney may expect to earn as their career grows.
| EXPERIENCE | SALARY |
| Entry Level (0-12 Months) | $80,000 |
| Early Career (1-4 Years) | $87,000 |
| Mid Career (5-9 Years) | $125,000 |
| Experienced (10-19 Years) | $146,000 |
Bachelor’s Degree: $73,000 is the average salary.
Masters’ Degree: $101,000 is the average salary.
Entering the legal law as a tax attorney is a lucrative method to obtain job experience and broaden your knowledge of tax law. Individuals who work as tax attorneys may be able to develop in their careers. The table below lists the common career pathways of a tax attorney and their average annual salary.
| POTENTIAL NEXT STEP | SALARY |
| Attorney/Lawyer | $83,675 |
| Tax Manager | $96,530 |
| Corporate Counsel | $115,260 |
What are the Tax Attorney Salary High Paying States?
According to the BLS, the top states for a tax attorney in terms of salary are the District of Columbia, California, New York, Massachusetts, and Connecticut. These states have higher-than-average incomes, making them appealing to tax attorneys. The table below shows the annual average salary for a tax attorney in each of these states.
- Annual Mean salary in District of Columbia: $192,530
- Annual Mean Salary in California: $171,550
- The Annual Mean Salary in New York: $167,110
- Annual Mean Salary in Massachusets: $165,610
- Annual Mean Salary in Connecticut: $153,640
The top industries for tax attorneys, according to the BLS, are subscription programming, the oil and coal industries, motor vehicle manufacture, and computer equipment manufacturing. These complicated industries must comply with government rules, regulations, and tax laws, which necessitate the skills of a tax attorney. The table below shows the average salary for each industry.
| INDUSTRY | ANNUAL MEAN WAGE |
| Cable and Other Subscription Programming | $234,310 |
| Pipeline Transportation of Crude Oil | $215,700 |
| Motor Vehicle Manufacturing | $205,610 |
| Computer and Peripheral Equipment Manufacturing | $204,710 |
| Petroleum and Coal Products Manufacturing | $200,830 |
Read Also: List of Fortune 1000 Companies in 2023, Updated!!! (How to Invest Guide)
Are Tax Attorneys In HIigh Demand?
Career Development in the Past
Careers in this industry are expanding since most industries require legal professionals to enter new markets, file documents, pay taxes, or challenge fines and other IRS difficulties. Professionals must complete rigorous educational and certification standards, resulting in a specialized and competitive workforce.
Future career Development
According to the BLS, job growth in this field will be 6% through 2026, which is in line with other occupations. Even with favorable employment growth, the BLS predicts that competition will remain strong because more law students graduate each year than there are opportunities available.
Top States for Tax Attorney Job Creation
Tax attorney jobs are expected to rise in several states over the long term, according to long-term predictions. Utah, Nevada, Colorado, Arkansas, and Texas are the top states for job growth, according to Projections Central statistics. The table below shows the predicted job growth rates for each state, which are all much greater than the national average.
- Utah
Change of 22.5 percent from 2016 to 2026
- Nevada
Change of 21.3 percent from 2016 to 2026
- Colorado
Change of 18.7 percent from 2016 to 2026
- Arkansas
Change of 15.9 percent from 2016 to 2026
- Texas
Change of 15.4 percent from 2016 to 2026
How Does Tax Attorney Differ from other Accounting Professions?
Tax attorneys are classified as accountants; nevertheless, their work is highly specialized and often necessitates additional schooling or expertise. Most accounting jobs, for example, just require a bachelor’s degree. Individuals who want to work as a tax attorney must first earn an undergraduate degree, then attend law school and pass the LSAT.
Earning potential and job development are two more differences. According to the BLS, accountants earn an average yearly salary of $70,500, with job growth expected to be 10%. This is a faster rate than the norm. Although a tax attorney’s salary is $120,910 per year, job growth is about average at 8%. While both alternatives provide satisfying professions, individuals should think about their aspirations before deciding on a path.
What are the differences between a tax attorney and a tax accountant?
A tax attorney is a licensed legal professional who specializes in tax law and can provide legal advice and representation for individuals and businesses facing tax issues. A tax accountant, on the other hand, is an expert in accounting and tax preparation, who can assist with preparing and filing tax returns, and provide advice on tax compliance and planning. The key difference is that a tax attorney is trained in the legal aspects of tax law and can represent clients in court, while a tax accountant cannot.
How can a tax attorney help with estate and gift tax planning?
A tax attorney can provide expert guidance on estate and gift tax planning, helping individuals and families minimize the tax implications of transferring assets. This may include creating and implementing estate plans, preparing and filing gift tax returns, and advising on tax-efficient strategies for transferring wealth.
Can a tax attorney help with international tax issues?
Yes, a tax attorney can provide guidance on international tax issues, such as foreign income and tax reporting, foreign bank account reporting (FBAR), and cross-border transactions. They can also assist with resolving international tax disputes and navigating the complex rules and regulations of foreign tax systems.
How can a tax attorney help with payroll tax issues?
A tax attorney can provide assistance with a variety of payroll tax issues, including compliance with federal, state, and local payroll tax laws and regulations. They can help employers navigate the complexities of payroll tax compliance, including payroll tax deposits, tax forms, and reporting requirements.
What should I do if I receive a tax notice or summons from the IRS?
If you receive a tax notice or summons from the IRS, it’s important to take immediate action. A tax attorney can provide guidance on the steps you need to take and represent you in negotiations with the IRS. They can also assist with resolving tax disputes and appealing unfavorable decisions.
How can a tax attorney help with tax fraud investigations and charges?
If you are under investigation for tax fraud or have been charged with a tax crime, it’s essential to have experienced legal representation. A tax attorney can provide guidance on your rights and responsibilities, represent you in court, and negotiate a settlement or plea agreement on your behalf. They can also provide guidance on the potential consequences of a tax fraud conviction and help protect your rights and interests throughout the legal process.
Tax Attorney FAQs
What does a tax attorney do?
Tax attorneys aid clients in navigating various taxation regulations and resolving issues. They may offer continuing proactive advice to corporations, or they may solely represent clients facing audits or legal processes.
Is it worth getting a tax attorney?
Whether you are a corporation or an individual, a tax attorney is essential for your tax preparation. They may also ensure that you don’t make any mistakes when filing your taxes, which could lead to an IRS audit.
How much does it cost for a tax attorney?
Every tax attorney charges a different cost, but expect to pay between $200 and $400 per hour. Some of the most reputable and experienced attorneys may charge $1,000 per hour or more for their services. Flat Fees: Some taxpayers may be able to bargain for a flat price for legal counsel against the IRS.
What is the difference between a tax attorney and a CPA?
Despite the fact that both professions can assist you in preparing tax paperwork and advising you on tax liabilities, tax attorneys are legal professionals trained in tax law, whilst CPAs are accountants with extensive training and certifications in the financial side of tax reporting.
