Editor’s Note: ABA Tax Times interviewer Jeremiah Coder (ATT) recently spoke with Dianne Mehany (DM), a member of Caplin & Drysdale Chtd., about her decision to choose a career in tax and her experiences working in tax controversy.
May 30, 2020 People in Tax
Interview with Dianne Mehany
By Jeremiah Coder, Washington, DC
ATT: Dianne, can you tell us something about what got you interested in tax in the first place?
DM: At the beginning of my third year of law school, I had fairly concrete plans to become a state prosecutor. But then a new tax professor, a former DOJ prosecutor, convinced me to sign up for his introductory tax class, telling me it might be “useful” in my chosen profession. Of course, I now realize that was just a ploy, but I am glad it was. I loved the class and, due to his encouragement, ultimately decided to pursue an LL.M. in tax. The rest is history.
ATT: Could you tell us something about how your career progressed? Where did you go for your LL.M. and what did you do right after finishing your LL.M. degree? Have you always worked at Caplin & Drysdale?
DM: I clerked at the U.S. Tax Court while pursuing my LL.M. in Tax at Georgetown. After finishing there, I became a tax litigator. I joined Caplin & Drysdale about six years into my practice. The firm was in the forefront of the offshore disclosure world, and the members allowed me to craft a practice that married tax controversy with cross-border tax planning. I’ve been with Caplin & Drysdale for ten years now.
ATT: What, if anything, has surprised you most about the practice of tax law?
DM: I am still surprised that leaders in the field can consider the same statute, regulations, and even jurisprudence yet arrive at completely opposing interpretations. The application of the Code is not black and white. I love that about this field.
ATT: How did you first get involved in the Tax Section?
DM: When I was clerking at the U.S. Tax Court, the various judges would encourage the clerks to attend the May Meeting every year. I quickly discovered it was a worthwhile endeavor and committed to attending regularly. And, I learned that young associates were welcomed if we piped up and volunteered to prepare slides!
ATT: Did you find any significant mentors/influences in the profession, either at the Tax Court or in private practice?
DM: I am incredibly lucky to count attorneys for both the government and private practice as friends and influences. The tax bar is a fairly tight-knit group, and I am happy to be a part of it.
In my practice specifically, I need not look to distant sources. I have worked with the best. I learned the art of judicial argument from David Aughtry at my former firm and the importance of technical mastery from Richard Skillman at my current firm. Finally, any personal success I enjoy is due directly to the influence and mentorship of Scott Michel, a fellow member of my firm.
ATT: What kinds of tax controversy are you most engaged in? Is there a significant issue that stands out from your recent experience as an example of the helpfulness of mentors in dealing with matters that come before you?
DM: I specialize in cross-border issues, particularly with respect to foreign trusts, foreign closely-held companies, and pre-immigration or pre-expatriation tax planning. This area allows me to engage in controversy, restructuring, and planning—many times with the same client! My mentors at Caplin & Drysdale were key in this development. They saw the interest I had in cross-border planning and encouraged me to pursue that interest and marry it with my experience in tax litigation and controversies. It allowed me to craft a unique niche in the tax controversy world.
ATT: Having seen various swings in IRS enforcement activity over the past decade, are there any constants in the life of controversy work?
DM: It may be trite to say, but the only constant is that there is no constant! That aspect has drawn many of us to this practice. It makes for an opportunity to plot your own course in terms of specializing in sub-areas.
ATT: If you could change one aspect of tax controversy, what would it be and why?
DM: If I could change one aspect, I would broaden the applicability of reasonable cause exceptions. I am concerned that the government is arbitrarily chipping away at its usefulness for taxpayers. That bothers me a great deal. Particularly in the case of the reliance on professionals defense, reasonableness is not tantamount to heightened knowledge, nor is it a requirement for a taxpayer to become an investigative journalist to determine whether his professional is “qualified.”
ATT: Has “globalization” of tax changed how international tax lawyers think about the risks facing clients?
DM: It is not enough anymore to master U.S. tax law. In my practice now, I must consider the laws of multiple jurisdictions and ensure that those laws do not prohibit or impede the U.S. plan. Working with non-US attorneys and professionals is now more than desirable; it is often necessary. Unfortunately, the clients do not always realize this—so this evolution of the practice must be handled carefully.
ATT: When you’re not busy thinking about tax, what do you do to unwind? How important is it to maintain balance for mental health?
DM: My husband plays guitar and I play the piano, so there is a lot of music in our household. We have a four-year-old and a five-year-old who love to “make music” with us, so that is a frequent activity in our house. If the practice of law doesn’t work out long-term, maybe I can start a family band?
Also, sports. Lots of college sports—GEAUX TIGERS! I am not sure how helpful that is to my mental health, but it’s a devotion that cannot be ignored.
ATT: Do you have a favorite depiction of a lawyer in a movie or book?
DM: No, I refuse to watch films or read books about lawyers! Instead of relaxing and getting lost in the story, I find myself raging about the inaccuracies.