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Where Tax Law Is Practiced

Small Law: Tax law is practiced extensively among firms with 1-20 attorneys. These attorneys often work with small business owners on such issues as the best way to organize and operate the businesses so that they are in full compliance with tax laws while enjoying the greatest tax savings possible. In addition, tax attorneys in small firms handle tax litigation and audits, business succession planning, estate planning, etc. 
 
Large Law and National Law Perspective: Tax law has always been a significant part of the large and national law firm practice. Many firms have quite sizable departments focused solely on this area. In others, the tax department is smaller but works in tandem with the interrelated practice groups mentioned above. Tax attorneys in large and national law firms generally handle more sophisticated tax planning issues than their Small Law counterparts. For example, the former typically advise clients on the tax consequences of a merger or acquisition, divestiture, or corporate restructuring. In addition, they may work with large corporations on issues related to employee stock ownership or pension plans. These tax attorneys might also have extensive dealings with tax-exempt organizations, foreign companies operating within the U.S., or American companies doing business abroad.
 
Corporate and Public Counsel: Various government agencies and corporations also need tax lawyers. The government side of the market, encompassing federal, state and local tax authorities, obviously places a special emphasis on tax collection and audit/litigation. On the federal level, tax controversy typically involves the IRS’s tax return audit process, administrative appeals, and all other phases of tax disputes, including the taxpayer’s appeal to the U.S. Tax Court and beyond. As for tax departments within corporations, they are not legal departments and do not generally report to the general counsel’s office, but rather they are a financial department and, as such, report to the CFO. Tax departments are usually focused on tax planning issues. For example, these departments offer tax advice internally on issues such as:
 
·         how to structure a business transaction to produce the most satisfactory tax results;
 
·         whether to acquire or simply partner with a target company;
 
·         whether to lease or buy equipment or facilities, etc.
 
In addition to tax planning, corporate tax departments usually have a separate group focused on compliance. These tax practitioners (also often accountants, not lawyers) prepare returns, maintain the books of the corporation, and oversee related corporate controls (internal audits, etc.). Thus, within corporate tax departments, practitioners are generally accountants, MBAs, enrolled agents, or simply those with a bookkeeping background. However, when a CPA in the tax department needs legal advice, he or she generally goes to a tax specialist within the general counsel’s office. If needed, the GC’s office will turn to an outside law firm.