I am curious as to how specialized tax litigation is, especially criminal defense. I am currently in a tax LLM program, but have experience with a criminal defense firm. I enjoyed that experience, I am enjoying my LLM experience, and am curious if it is feasible to try to blend the two and focus primarily on tax litigation as opposed to planning.
Or, is tax litigation and especially criminal tax defense too specialized to make myself marketable to hiring firms?
Tax litigation, better known as tax controversy work, has a couple of areas of which you can focus on. There are firms that only handle criminal tax issues for individuals and corporations. More commonly, however, is to be a general tax controversy lawyer, which means you handle the IRS audit process, appeals, civil litigation in federal and state courts, and in rare instances, you may be a second chair to criminal tax matters.
There are a couple of very sophisticated criminal tax boutique firms that focus only on criminal tax matters. i think the more marketable practice area is to be a tax controversy practicioner.
This area is growing and law firms are always looking for good tax controversy people, especially now since the IRS will take its low hanging fruit and clients need quality representation in the audit process. given your background and interests, tax controversy is a great choice for you and I know some very weatlhy partners who make a living off of this!
Tax litigation in general is a pretty small group. The problem with trying to focus on criminal tax is that a lot of that work is picked up by the white-collar defense bar, general crim defense attorneys, or public defenders. There doesn't seem to be enough tax crime specific work to do only that. There are boutique tax firms that are very qualified in criminal tax defense, like Hochman in LA or Sideman Bancroft in SF, but they also do all types of controversy. In addition, former prosecutorial tax or IRS Counsel experience seems to be a prerequisite.
Criminal procedure is its own beast, so the fact that you've done criminal defense is a plus. The boutique firms are going to require a lot of experience, though, so I would suggest considering IRS Counsel or DOJ tax as mid-term goals. State tax agencies also do criminal tax. Outside of that, Big 4 has controversy groups and the occasional big firm has controversy tax groups as well.
I agree and would also add that my firm has seen a large increase in the controversy tax positions that companies have open. The IRS has been hiring large numbers of people and not just entry level people out of school, but seasoned tax professionals who worked in professional services or industry who know the ins and outs of how corporate tax functions work. This has caused the IRS to become much more aggressive on their audit stances and increased the demand for more resources in the controversy area for companies and in the firms that represent clients.
The only downside to a controversy specialty is like most specialties, you will not be a head of a tax department by being a controversy specialist itself. You must have broader skills to advance in a corporation to the top level. That said, you can make a very nice living and work on very sophisticated things by specializing in controversy.
Thanks for the insights everybody. I really enjoy my current tax procedure course, enjoyed my criminal work, and really want to do some form of litigation, so perhaps general tax controversy is the way to go for me.
Don't care about being super wealthy, just want to enjoy what I do and make enough to have a decent living and pay off my massive student debt, lol.
How do you tax controversy practitioners ensure that you actually get paid for your work? Do you collect a retainer up front and bill against it? Can you actually make any money at all representing individual tax payers? Do you ever lose your fee because your client declares bankruptcy?
How do you tax controversy practitioners
ensure that you actually get paid for your
work?
Selective client acceptance.
Do you collect a retainer up front and bill
against it?
Depends on the client, but it is done. Larger clients do not have a problem paying. If you're dealing with the wealthy, they'll gladly spend $100k to save $5mm.
Can you actually make any money at all
representing individual tax payers?
As long as they have money! But seriously, depends on the client. There is money to be made on individuals.
Do you ever lose your fee because your
client declares bankruptcy?
Yes, and we lose a lot just by writing off fees. Sometimes, it is not worth trying to collect $X from the client.
Individual wealthy clients are some of the most difficult clients. It's their "own" money, and they don't want to part with it (either to the IRS or to their advisers). This is as opposed to representing corporations.
What's nice is that you're usually in very high demand. You can tell the clients "you're going to pay and you're going to like it." If they complain, they can go to another practitioner easily enough.
