A tax attorney, also known as a tax lawyer, is an attorney who specializes in taxes. Tax attorneys are typically involved in analyzing from a tax perspective, advising clients on the tax consequences of specific transactions, and litigating the tax treatment of disputed tax positions.
Transactional work may include cross-border transactions, M&A support, real estate transactions, and mutual fund work.
Tax Attorney
Tax litigation can take place in the Tax Court, Federal District Court, or Court of Federal Claims, as well as criminal proceedings in the case of tax fraud. These attorneys are employed in a variety of practice settings, including law firms, accounting firms, boutique tax firms, corporations, federal and state agencies, nonprofit organizations, and tax courts.
Categories Of Tax Law – Attorney for Taxes
Tax law is an accumulation of statutes, regulations, standards, and clauses. These define how individuals and companies pay taxes to the government.
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Personal Income
Personal income tax is the rate of tax someone pays on their income. The government usually determines the income brackets and their associated tax rates. The rate of income tax usually increases if the individual reaches a higher income bracket. Tax lawyers often represent clients who appear in court for issues relating to the client’s individual income tax.
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Goods and Services
The goods and services tax (GST) is a broad tax that applies to most goods and services. The tax authority usually defines which goods and services include a GST charge. Clients may hire a tax lawyer for advice on how to proceed with their GST registration when merging or closing their business.
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Capital Gains
If someone makes a profit from selling an asset, they normally pay a capital gains tax. The capital gains tax is technically a part of income tax. This means an individual or business pays tax on their capital gains at the same rate as their income tax. Tax lawyer helps their clients identify regulations and definitions regarding their capital tax.
What Does a Tax Attorney Do? Tax Lawyer
Tax attorneys help their clients navigate the complex tax codes at the federal, state, and local levels. They advocate on behalf of their clients with tax agencies when needed. Tax attorneys stay up-to-date on the latest tax issues and laws to act as a resource for their clients. Common duties for tax attorneys include:
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Handling Tax Disputes
Tax attorneys help handle disputes related to tax obligations. They may negotiate on behalf of their clients with the IRS.
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Legal Research
Tax attorneys must conduct the necessary legal research to understand tax law and policy. Since laws change frequently, tax attorneys should know how to find and reference the latest legal codes.
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Protecting A Client’s Rights
A tax attorney can protect your rights and negotiate with the IRS on your behalf. With their in-depth understanding of tax law, tax attorneys are well qualified to act as a go-between between their clients and the IRS and are skilled at:
. Negotiating compromises with the IRS
. Removing account levies
. Settling back taxes
. Challenging IRS rulings in court
. Undoing proper liens
. Halting wage garnishment
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Advising Clients on Legal Matters
Clients commonly seek guidance on tax-related matters such as retirement, mortgages, and income.
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Providing Personal Wealth Management Assistance
Many taxpayers hire tax attorneys to help reduce their tax liabilities in advance of filing tax returns. A tax attorney can provide related legal documents and offer advice on how to manage your wealth to minimize your taxes. Other wealth management services that tax attorneys offer include:
. Creating wills and trusts
. Incorporating businesses
. Drawing up business contracts
. Advising on international tax considerations
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Drafting Documents
These professionals create and maintain many types of documents, including wills, employment-related agreements, court briefs, and tax forms.
Key Hard Skills for Tax Attorneys
Here are some hard skills that tax attorneys should have:
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Legal Knowledge
Tax attorneys must possess a strong understanding of taxation laws and regulations. This knowledge is generally measured through the bar exam.
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Legal Research Skills
Strong research skills allow tax attorneys to locate all relevant texts, cases, or filing requirements. This includes the ability to use legal databases such as Lexis or Westlaw.
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Accounting Skills
Tax lawyers should have a particular understanding of accounting principles and procedures.
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IRS Requirements
Possessing a clear understanding of IRS forms, procedures, and filing policies is key for tax attorneys.
Key Soft Skills for Tax Attorneys
Some key soft skills tax attorneys need are as follows:
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Attention To Detail
Tax lawyers with attention to detail can identify disparities between their client’s case and the law. Attention to detail may also help a tax lawyer when finding relevant laws that apply to their client’s legal situation.
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Communication
Tax lawyers with excellent communication skills can transfer information with efficiency and clarity. This can help tax attorneys provide accurate advice to their clients.
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Negotiation
Negotiating legal arrangements and influencing the jury are usually helpful skills for a tax lawyer. They may implement persuasive communication techniques to help them negotiate on behalf of their client.
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Critical Thinking
They use critical thinking skills to properly evaluate and analyze tax-related problems or questions to find the best possible solution.
Tax Attorney Areas of Expertise
They can work as a generalist or specialize in specific areas of tax law. Two popular specialties for tax lawyers are corporate tax and estate planning.
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Estate Planning
Estate planning and tax attorneys help clients and their families create trusts and make arrangements for a person’s money or other assets when they die. Tax attorneys may help clients create living trusts or wills. They advise clients on how to minimize tax obligations when transferring assets to their relatives. Tax attorneys can also assist in creating directives for end-of-life care.
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Corporate Tax
Corporate tax attorneys help corporations handle tax requirements, commercial transactions, and compliance matters. Corporations are often subject to different tax codes and filing requirements than individuals, so tax attorneys must have a strong understanding of corporate tax law. Corporate tax attorneys may also advise on the financial or tax implications of business mergers, sales, and acquisitions.
They commonly guide commercial real estate purchases or other asset purchases that may affect a company’s taxes.
FAQs
Is Tax Law a Good Career?
A career in tax law may provide you with job satisfaction and a set of transferable skills. There may be potential to advance your legal career to a position with a higher salary and more responsibilities.
As a tax lawyer, you may also assist your clients with disputes and other tax legalities. Helping others may provide you with a sense of purpose, which often makes the role of a tax lawyer more satisfying.
When To Hire a Tax Attorney
Some situations may be especially suited for hiring a tax attorney.
. Starting a Business: A tax attorney may be able to help devise tax-smart strategies for starting, buying, selling, or expanding a business.
. Estate Planning: a tax attorney can help you devise estate planning strategies and handle the paperwork involved in minimizing estate taxes, transferring assets to family members, setting up trusts, and other tactics.
. Tax Relief: if you have an outstanding balance with the IRS or other tax authority that you want to negotiate or contest, a tax attorney may be able to help you pursue options such as an offer in compromise, or innocent spouse relief. And installment plans to pay tax bills over time.
. Tax Disputes: If you have a tax dispute; want to sue the IRS, the state, or a local tax authority over a tax matter; or want a hearing before the U.S. Tax Court, a tax attorney can help.
