While the tax profession requires specialized expertise, tax professionals know that there is great diversity in the career paths available to law school graduates. Yet, it can be challenging for those interested in the tax field to appreciate the range of possible tax careers and distinguish between what different tax practitioners do. The following is a 3-pronged framework for describing tax careers available to JDs. There are more comprehensive resources available to help aspiring tax professionals plan their careers; however, law students and new lawyers who are just beginning to consider the possibility of pursuing tax will benefit from this concise and accessible introduction.
You can categorize tax careers along three dimensions: practice area, practice role, and practice setting. Practice area covers the substantive topic(s) about which the tax professional advises. Practice role describes the tax professional’s function—does the tax professional help with planning, compliance, controversy, or some combination? Practice setting describes the type of organization in which the tax professional works.
Tax practitioners focus their work on a wide array of substantive areas. Common specialties include:
- corporate tax
- partnership tax
- US international tax
- state and local tax
- individual income tax
- estate and gift tax
- tax-exempt organizations
- tax issues related to employee benefits and executive compensation
Some practitioners have broad tax practice areas that include more than one of the above. Other tax practitioners focus more narrowly and become experts in tax sub-specialties (e.g., real estate investment trusts, taxation of financial instruments, tax issues for venture capital and private equity funds, property taxes, and low-income taxpayers).
A tax professional’s practice role is about the function they serve when assisting clients. Specifically, does the tax adviser assist with planning, compliance, controversy, or some combination? Thus, is the tax adviser primarily involved before transactions occur, between when transactions occur and when returns are filed, or after returns are filed?
Tax planners help clients arrange their affairs prospectively to achieve the client’s business, economic, and financial goals while minimizing tax. For example, these tax advisers help clients make choice-of-entity decisions, structure cross-border transactions, or plan their estates.
Tax professionals doing compliance work help clients determine how to report their tax matters appropriately to government authorities. These tax advisers analyze events that have already occurred to determine how to reflect them on returns. However, a tax compliance professional may also be involved during the planning process if the reporting decisions are complex.
Tax controversy lawyers handle disputes about taxes, including audits and refund requests. These lawyers are typically involved after transactions have occurred and after returns have been filed. However, a tax controversy lawyer may be consulted earlier to help preemptively prepare for a dispute if a matter is expected to be contentious.
People with law degrees pursue tax careers with different types of employers, including law firms, accounting and consulting firms, government, industry, and academia.
Tax lawyers at law firms tend to do planning and controversy work, but they typically do relatively little compliance work. Tax work at law firms tends to be more qualitative and less quantitative than the tax work at accounting or consulting firms.
Accounting and Consulting Firms
Many tax-focused JDs also work at accounting and consulting firms that provide tax services. These tax advisers commonly perform planning and compliance work and, as a result, are essential parts of a client’s team of advisers. However, tax JDs working at accounting or consulting firms in the United States can provide tax advice but may not practice law. As a result, the drafting of contracts or other legal documents that effectuate the results of planning work is generally not done at accounting or consulting firms.
Tax lawyers handle tax controversies (both civil and criminal) on behalf of the government, respond to ruling requests from taxpayers, and assist with drafting regulations and other administrative guidance, among other responsibilities. Tax lawyers also serve as Tax Court judges or clerks for such judges. Also, tax lawyers assist with drafting tax legislation (e.g., working in the Office of Legislative Counsel), serve as experts for various legislative committees (e.g., for the House Committee on Ways and Means), and work on the staff of individual legislators. There are opportunities for JDs to pursue some of these careers, particularly in controversy and legislative/regulatory policy/drafting, at both the federal level and the state and local government level.
Tax lawyers may also work in-house at for-profit or non-profit organizations. In-house work may involve a combination of planning, compliance, and controversy work. In most companies, tax professionals work in a tax department that reports to a chief financial officer. Still, some in-house tax lawyers may work in a legal department led by the company’s general counsel. Entry into in-house tax positions is typically limited to experienced tax professionals. Thus, most tax-interested law school graduates work for at least a few years at a law firm, accounting or consulting firm, or in government before moving to an in-house position.
Academia and Policy Centers
A small number of tax lawyers work in academia, where we teach students about the tax law, perform research, write about the tax law, and participate in the governance of our institutions. Many tax academics head low-income taxpayer clinics, combining the education of aspiring tax lawyers with a practice that serves vulnerable taxpayers who otherwise may not be able to afford tax advice. Tax lawyers also work for public policy think tanks such as the Tax Foundation or the Tax Policy Center.
There are numerous possible combinations of practice areas, practice roles, and practice settings, meaning there are many different tax law career paths. Whatever your tax career goals, don’t forget that all of us, across tax practice areas, roles, and settings, also have the opportunity to contribute to the public good (e.g., through pro bono work), to the tax profession (e.g., by participating in professional organizations such as the ABA), and to the development of tax policy and the particulars of tax law (e.g., by commenting on legislative or regulatory proposals). I encourage you to seize the opportunities as part of whatever tax practice path you pursue.
This is an edited and abridged version of an article that was published with the title "An Introduction to Tax Careers for JDs." It originally appeared in the ABA Tax Times, volume 38, number 3, spring 2019.
©2019 by the American Bar Association Section of Taxation. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.