August 13, 2020

tax lawyers

The Happiest Lawyers Are Tax Lawyers

Of 17,000 associates from over 150 large and mid-sized law firms surveyed by Vault for their annual Law Firm Associate Survey, it's the tax lawyers who clearly they love their jobs. Or rather, are at least more "satisfied" than their counterparts in other practice areas. As you can see from the chart, it was a […]

ICYMI: Portlandia Tries to Make Tax Lawyers Cool

Maybe you don't watch Portlandia, maybe you do, we don't really care. But either way, we think you should be aware this happened:

(UPDATE) Things Are So Bad at Law Firm Dewey & LeBoeuf That One of Its Top Partners Left for KPMG

You might not be aware of this, but mega law firm Dewey & LeBoeuf is in a lot of trouble. It seems to have started back in February with rumors of financial troubles and things have spiraled from there. Partners leaving in droves. Late bonuses. Layoffs. Problems with K-1s. The bright side of all these troubles […]

PwC Now Picking Up Talent From a Big Law Firm

Namely, Skadden, Arps, Slate, Meagher & Flom LLP. Pamela Olson will head up PwC’s Washington National Tax Services practice when she leaves her position as Skadden’s Washington office tax group on January 1st. From the sounds of it, everyone is pretty giddy about this, mostly because Ms. Olson is kind of a big deal. “Everyone in the tax community knows Pam,” said Mark Mendola, PwC’s U.S. Tax leader. “Now our clients will be able to gain from her wisdom. In the current uncertain economic environment, the counsel she will provide to PwC clients is certain to be more invaluable than ever before.”

Why does everyone know her? Well she’s pretty good at what she does and she’s been around. She’s been an assistant secretary of tax policy with the Treasury department, chair of the American Bar Association’s Section of Taxation, a senior economic adviser to the Bush-Cheney campaign (we won’t hold that against her), a tax adviser to the National Commission on Economic Growth and Tax Reform and “repeatedly in Chambers USA: America’s Leading Lawyers for Business and The Best Lawyers in America for tax law.”

So not exactly a lightweight. All this and she never worked a day at KPMG. Amazing.

[via PwC]

IRS Office of Chief Counsel Not in the Market for Any New Blood

After just telling you why an accounting career path may be a little more secure than law, a friend of GC passed along this little bit of news from the IRS’s Office of Chief Counsel:

From: [IRS Office of Chief Counsel]
Date: Mon, Oct 17, 2011 at 12:55 PM
Subject: RE: Chief Counsel Honors Program
To: [IRS Counsel Hopeful]

Thank you for applying to the Office of Chief Counsel. Unfortunately, we will not be hiring under the Honors Program for fall 2012. We appreciate your interest and hope that you will consider us in the future. Thank you.

Attorney Recruitment & Retention Office
Office of Chief Counsel, Internal Revenue Service

On the other hand, if you’re interested in running a IRS garage sale, they do have some extra junk on their hands.

That Tax Shelter Seemed Like a Really Good Idea at the Time

It helps to be really smart if you want to talk yourself into something really stupid. That’s how a lot of bad tax shelters happen. Let’s call this one the “Dumb-Ass Deduction Distressed Asset-Debt” (“DAD^2” or “DAD-squared”) shelter.

The ingredients:
• A bunch of near-worthless consumer receivables from a struggling Brazilian department store chain.
• A whip-smart Chicago tax lawyer, John E. Rogers.
• A bunch of LLC partnerships for tax-motivated investors.
• Some cash.


The Brazilians contribute their receivables – purportedly with a big built-in loss – to a partnership. This partnership contributes the debt to other LLCs. Shortly afterwards the first LLC buys out the Brazilians, who are desperate for cash, leaving the crappy receivables behind. The investor partnerships then write off the debts as bad debt deductions, giving big tax losses to the investors.

It can’t fail, right? Well, aside from the obvious problems, like:

– The tax law presumes that if a partner (think Brazilians here) contributes stuff to a partnership, and then gets cash back in redemption of the interest within two years, then it wasn’t really a tax-free partnership contribution and distribution. Instead, the tax law presumes that the Brazilian sold the stuff for cash. The partnership was just a place to hide it for awhile.

– If the Brazilians hadn’t sold out, the tax law would have required them to get all of the losses. The tax law doesn’t let taxpayers shift gains or losses to others by joining a partnership. After all, that’s what S corporations are for.

The guy who put this thing together was smart, as people who put together sophisticated tax deals always are. The Tax Court spells it out:

Rogers is a member of the International Fiscal Association, an international tax group. He has also been a trustee of the Tax Foundation, a publicly supported foundation that researches tax policy issues and publishes papers. Rogers has worked with the Governments of Puerto Rico and Romania in developing programs implementing their industrial taxation programs. Rogers has written a number of publications, primarily on international tax matters, transfers of technology, the use of low-tax jurisdictions, and the compensation of executives outside the United States. In 1997 Rogers was invited to testify before the House Ways and Means Committee on fundamental international tax reform.

When a plan by someone who is that smart fails, it fails spectacularly. Tax Court Judge Wherry disallowed all of the bad debt deductions, and imposed penalties, pointing a finger at the lawyer-mastermind:

There has been no showing of reasonable cause or good faith on Rogers’ part in conceptualizing, designing, and executing the transactions. To the contrary, as we have detailed above, Rogers’ knowledge and experience should have put him on notice that the tax benefits sought by the form of the transactions would not be forthcoming…

I’m sure that, over drinks, Mr. Rogers would have me convinced that he was right. That’s why you should never buy a tax shelter until you sober up.

Cite: Superior Trading, LLC, 137 T.C. No. 6

Should an “Accidental” Tax Lawyer Go Back to School to Qualify for the CPA?

Back again with another edition of fix my career ASAP. Today, “an accidental tax lawyer” wants to obtain a CPA to bolster his small practice. Other lawyers look at him like he’s “crazy” when he discusses the IRC but our Regretful JD enjoys all the minutiae. Problem is, he’ll have to start from scratch since he has business background. Is this plan gold or is he a glutton for punishment?

Are you suffering from a case of summer-is-ending-which-means-busy-season-is-right-around-the-corner blues and are wondering if it’s time for a new job? Does your golf game suck? Do you wear pinstripes? Email us at advice@goingconcern.com and we’ll suggest something that wins.

Back to our lawyer friend:

So, long story short:

I’m an accidental tax lawyer. I studied neuroscience in college and went to law school to do patents. I took personal income tax as a summer course after my first year, was surprised that I both liked it and did well. Through the remaining two years of law school, I took corporate tax, gift and estate tax, state and local tax, natural resource taxation, two tax seminars, and averaged an A- in them all. Graduated, passed the bar and opened my own tax shop, mostly small business and non-profit formation, opinion letters for CPAs and walking taxpayers through audits. I operate on a one-stop-shop model-come to me and I’ll handle your legal and tax planning needs. I’m good at what I do, and I’ve been profitable since the first year.

Here’s where you guys come in: I think I’d really enjoy being a CPA. Other lawyers look at me like I’m crazy when I talk about the internal revenue code, but I find tax planning enjoyable and it lets me be creative. Am I crazy to consider going back and taking the courses necessary to qualify for the CPA exam? My local public university offers a graduate “Pre-CPA” program, with just the courses required to qualify for the exam. As an undergrad, I took two semesters of calculus and two semesters of inferential statistics, but the rest was basically hard science (physics, microbiology, organic chemistry, neuroanatomy, pharmacology, etc). Except for my tax law background, I’d basically be starting from scratch.

Hell, is there even a market for CPA/JDs? I don’t need to work Big Four (I like meeting with and managing my clients on a personal level. I find it very rewarding), but to keep a roof over my head I’d need to earn at least mid-five figures. If I continue with the solo practice model, I’d be able to provide accounting, tax and legal services, but I’m not sure that accounting as a value-add would be worth tuition + lost opportunity time when I’m studying instead of working.

Any advice you can offer me is appreciated.

Sign me off,
“Regretful JD”

Dear Regretful JD,

First off, if that’s the short version, thanks for sparing us the details. YEESH. Secondly, neuroscience to patents to tax is quite the interesting progression but we won’t pry…it was a woman, wasn’t it?

Now, then. Your situation. Personally I think you’re at a huge advantage compared to the CPAs out there that are thinking about going to law school. Some of you remember the post we did last year discussing that particular jump and it’s not an easy one. Law school grads, as our friends at Above the Law will tell you, aren’t exactly drowning in job opportunities these days but they are being suffocated by six-figure school debt. For you, Regretful JD, that ship has sailed. You’ve got your practice set up, enjoy the work, and are earning a steady dollar.

The problem, as you stated, is that you’d be starting from scratch. If you’re single and don’t have a grip of cash stuffed in your mattress to get you through the “Pre-CPA” program, you’re going to be living on Cup o’ Noodles and saltines smeared with dijon mustard. Are you ready to make that sacrifice? What about your clients? Are you just going to drop them or will you attempt to keep them by promising the world and more once you’ve got your CPA? Your life could be a living hell trying to juggle tax seasons and school work.

As for your question regarding “a market for CPA/JDs” our aforementioned post found that, yes, there is something to be said for the CPA and JD white-collar, one-two punch. Being able to understand legal ramifications of your clients’ decisions as well as being able to dig into the numbers and actually understand them has proven to be a great selling point.

Ultimately the decision comes down to one of logistics. Can you work, go to school and maintain your sanity and/or shred of a social life that you have left? It’s not impossible but you’ll have a rough couple of years, to be sure (don’t forget about the CPA Exam!). Those that have done it will likely say it was worth the struggle but everyone has their breaking point. What’s yours?

Also see:
Tax Lawyer Pursuing CPA Needs to Know: Take More Classes or Cram with a Review Course? [GC]
The Scam That Accounting Education Isn’t [GC]