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CrimeAndPunishment

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CrimeAndPunishment
  • Applicant

Hopefully we can have a nice tax law discussion in this forum, we hear a lot of people talk about wealth inequality nowadays and there is no better area to deal with this than tax law! So get in the kitchen and make a double Irish with a Dutch sandwich 😉 

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СлаваУкраїні
  • Law Student

As a 1L, I’d be interesting in knowing what tax law actually entails. What do tax lawyers actually do? What does a day in the life of a tax lawyer look like?

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leafs_law
  • Lawyer

I will see if I can get my tax lawyer friend who was active on LS to post here. Although, full disclosure required, the only reason to be friends with a tax lawyer is to get the charity donation credit associated with it 🙂

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https://www.propublica.org/article/the-secret-irs-files-short-form-a-quick-guide-to-what-we-uncovered

 

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ProPublica has obtained a vast trove of IRS data on the tax returns of thousands of the wealthiest people. It reveals just how effectively the richest sidestep the tax system, which we’ll show below. But first, to understand the scale of that wealth, let’s look at the richest person in the United States: Jeff Bezos.

 

American, but it looks like some IRS data leaked?

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https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax

 

Longer form article

 

Quote

ProPublica has obtained a vast trove of Internal Revenue Service data on the tax returns of thousands of the nation’s wealthiest people, covering more than 15 years. The data provides an unprecedented look inside the financial lives of America’s titans, including Warren Buffett, Bill Gates, Rupert Murdoch and Mark Zuckerberg. It shows not just their income and taxes, but also their investments, stock trades, gambling winnings and even the results of audits.

Taken together, it demolishes the cornerstone myth of the American tax system: that everyone pays their fair share and the richest Americans pay the most. The IRS records show that the wealthiest can — perfectly legally — pay income taxes that are only a tiny fraction of the hundreds of millions, if not billions, their fortunes grow each year.

Many Americans live paycheck to paycheck, amassing little wealth and paying the federal government a percentage of their income that rises if they earn more. In recent years, the median American household earned about $70,000 annually and paid 14% in federal taxes. The highest income tax rate, 37%, kicked in this year, for couples, on earnings above $628,300.

The confidential tax records obtained by ProPublica show that the ultrarich effectively sidestep this system.

 

Edited by Kurrika
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I saw a lot of tweets about that article, but is there anything new in it?  Like, it compares people earning regular employment income to the amount that business owners' "fortunes grow every year". This particular aspect of our tax system is pretty well known. That growth hasn't been taxed yet.

 

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3 minutes ago, Jaggers said:

I saw a lot of tweets about that article, but is there anything new in it?  Like, it compares people earning regular employment income to the amount that business owners' "fortunes grow every year". This particular aspect of our tax system is pretty well known. That growth hasn't been taxed yet.

 

They've focused a lot on pregnant gains.

 

I'm less interested in that particular policy issue and more on the leak part of it.

Edited by Kurrika
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For an american audience though, having specific names and graphs and numbers and such may be persuasive or make a policy debate resonate? 

 

It can sometimes feel very random what pieces of tax information resonates with the public or what policy issues they suddenly care about.

I think in Canada at least, that this is partly due to the fact that reporting on tax stuff is pretty dogshit. Only a couple of them actually bother to try to understand what is going on.  Most articles are 95 per cent word for word copies of either background stuff put out by the government or background stuff put out by a stakeholder / accounting firm / the canadian taxpayers federation.

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They published their thinking behind the article too:

https://www.propublica.org/article/why-we-are-publishing-the-tax-secrets-of-the-001
 

Quote

 

We obtained the information from an anonymous source who provided us with large amounts of information on the ultrawealthy, everything from the taxes they paid to the income they reported to the profits from their stock trades.

We do not know the identity of our source. We did not solicit the information they sent us. The source says they were motivated by our previous coverage of issues surrounding the IRS and tax enforcement, but we do not know for certain that is true. We have considered the possibility that information we have received could have come from a state actor hostile to American interests.

Provenance is not essential; accuracy is. We have gone to considerable lengths to confirm that the information sent to us is accurate. We compared the tax data in our possession to other sources of the same information wherever we could find them, some of which were public (a tax return for a candidate for national office), others of which were private. In every instance we were able to check — involving tax filings by more than 50 separate people — the details provided to ProPublica matched the information from other sources.

 

 

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The state actor angle is wild.  "Either your IRS staff has gone rogue and walked out of the building with a usb drive  or everyone's tax records got hacked.... Care to comment IRS?"

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Chambertin
  • Lawyer

I'm kind of with Kurrika, the tax aspect of it is dumb and clearly driven to produce clicks. 

 

The leak part is kind of interesting. You have to wonder if there is a contingent within the IRS that sort of thinks we can't stop these people, maybe we can shame/outrage the public enough to do something. 

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On 6/7/2021 at 10:38 PM, leafs_law said:

the only reason to be friends with a tax lawyer is to get the charity donation credit associated with it 🙂

I was also promised access to a timeshare in a tropical tax haven 🙂 

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CrimeAndPunishment
  • Applicant
5 hours ago, Chambertin said:

I'm kind of with Kurrika, the tax aspect of it is dumb and clearly driven to produce clicks. 

 

The leak part is kind of interesting. You have to wonder if there is a contingent within the IRS that sort of thinks we can't stop these people, maybe we can shame/outrage the public enough to do something. 

They essentially want to tax additional wealth, "In the coming months, we plan to use this material to explore how the nation’s wealthiest people — roughly the .001% — exploit the structure of our tax code to avoid the tax burdens borne by ordinary citizens." This would be like if you have a cottage and a house and the real estate market is going up, we don't tax the citizen on the market value of the property every year if the value of the cottage increases, we wait until they dispose of the property and any gain or loss is realized. I agree with their point of making tax returns public information however. 

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Skweemish
  • Lawyer

Well I feel foolish, I made a tax thread in the practitioner discussion subforum because I didn't see this thread. BUT HONESTLY WHO PUTS TAX LAW UNDER CORPORATE IT IS CLEARLY AN INDEPENDENT DISCIPLINE-

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  • 1 month later...
Skweemish
  • Lawyer

So, I am considering taking the leap from my current gig (indirect tax manager at an accounting firm) over to the DOJ doing tax litigation. I'm still quite junior in my career (I guess I'm a 3rd year call now? Is that right?), and I'm a bit nervous about the jump. I've spoken with some friends of mine at the DoJ in tax, but goddamn if I'm not still nervous about the idea.

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1 hour ago, Skweemish said:

So, I am considering taking the leap from my current gig (indirect tax manager at an accounting firm) over to the DOJ doing tax litigation. I'm still quite junior in my career (I guess I'm a 3rd year call now? Is that right?), and I'm a bit nervous about the jump. I've spoken with some friends of mine at the DoJ in tax, but goddamn if I'm not still nervous about the idea.

These might be the people you've referenced talking to, but I'm pretty sure there are a bunch of DOJ tax litigators from our year at Dal. Can PM suggested names, if that would be helpful. 

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Skweemish
  • Lawyer
5 hours ago, realpseudonym said:

These might be the people you've referenced talking to, but I'm pretty sure there are a bunch of DOJ tax litigators from our year at Dal. Can PM suggested names, if that would be helpful. 

Hah, I think that is the case. I think the entire LP-01 cohort is from that year isn't it?

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Skweemish
  • Lawyer

Yesterday the MOF finally released their consultation call for the proposed luxury tax, as well as a primer paper for how they want it to work. This has been a hot topic with some of my larger clients lately so I'm excited to dig in.

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On 8/4/2021 at 12:18 PM, Skweemish said:

So, I am considering taking the leap from my current gig (indirect tax manager at an accounting firm) over to the DOJ doing tax litigation. I'm still quite junior in my career (I guess I'm a 3rd year call now? Is that right?), and I'm a bit nervous about the jump. I've spoken with some friends of mine at the DoJ in tax, but goddamn if I'm not still nervous about the idea.

 Everyone I've ever been in touch with on that side has liked working tax litigation at the DOJ.   You actually get into court on a regular basis.

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  • 1 month later...
Kimura
  • Lawyer

Congrats! @Skweemish

These questions go out to anyone and everyone involved in tax law:

What got you into tax law? How did you know you wanted to practice tax? Did you decide to pursue tax over another practice area, and if so, why?

What advice would you give to someone interested in pursuing a career in tax law? 

How necessary is a background in economics, commerce or tax to pursue a career in tax law?

What do the work/exit opportunities look like for tax lawyers (i.e. in-house counsel, government, Bay Street, solo practitioner)?

I often hear that tax is a very "difficult" area of the law to practice in - what is your take on this statement?

I'm genuinely interested in these questions, but I'm also just trying to get a conversation going for anyone interested like myself.

Thanks!

 

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On 10/1/2021 at 1:32 PM, Kimura said:

Congrats! @Skweemish

These questions go out to anyone and everyone involved in tax law:

What got you into tax law? How did you know you wanted to practice tax? Did you decide to pursue tax over another practice area, and if so, why?

What advice would you give to someone interested in pursuing a career in tax law? 

How necessary is a background in economics, commerce or tax to pursue a career in tax law?

What do the work/exit opportunities look like for tax lawyers (i.e. in-house counsel, government, Bay Street, solo practitioner)?

I often hear that tax is a very "difficult" area of the law to practice in - what is your take on this statement?

I'm genuinely interested in these questions, but I'm also just trying to get a conversation going for anyone interested like myself.

Thanks!

 

1) I like complicated rules and that area of law just clicked.  I signed up for tax 1 because it was a required course and really liked it and then took all the other tax courses and then some extra tax courses on top of that.

 

2) Take lots of tax courses and do the bowman moot. Try to clerk because clerking is fun.

 

3) Not necessary at all.

 

4) No clue.  I went into government straight after articling/clerking.

 

5) You need intellectual horsepower to excel and it can take quite a while to learn enough to feel confident. But any area of law needs that if you want to be really good at it.    

Edited by Kurrika
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