IRS APPROVED PROVIDER OF CONTINUING EDUCATION FOR ENROLLED AGENTS & CPAs
Several years ago, I wrote an article that was published in a continuing professional education journal that has since become obscure. The content addressed attorney versus non-attorney practice in United States Tax Court. It is time to resurrect that message, with updates.
Who Earns More Money?
There are just 250 United States Tax Court Practitioners and over 70,000 attorneys who are engaged in tax practice. A tax attorney in the U.S. who knows his/her business (i.e. top-earning litigator in a seasoned practice), usually earns between $1-1.5 million or more each year. It is indeed one of the more lucrative practice areas of law. An United States Tax Court Practitioner, an individual trained and experienced as an IRS enrolled agent aka tax accountant or a CPA, and who has passed the Tax Court Bar Examination, been vetted by the FBI, and then approved as an USTCP, can earn up to $1-1.5 million or more each year as well.
Law School Education versus USTCP Apprenticeship
The tax attorney has 3-6 years of law school, whereas the EA or CPA have attended no law school (although that's becoming less true), may have or have not attended college (if they're an EA); and if a CPA, most likely, does hold a four-year baccalaureate degree and/or a MST/MBA. Their USTCP approval was obtained, most likely, after they self-prepared or program-prepared (usually for less than one year), before they passed the rigorous, four-hour tax bar exam that tested their understanding of the Internal Revenue Code (IRC) and its legal applications and arithmetical nuances as well as case law, published opinions and certain legal topics.
Insofar as the tax attorney is concerned, his/her cost for their legal education probably amounted to $100,000 to $400,000, depending on when and where they received their legal education. For the EA, their cost to prepare for the IRS Special Enrollment Exam (SEE) included any prep course to which they subscribed, and the fees associated with that training (usually amounting to several hundred dollars, up to several thousand dollars). And of course, if they've gone to college, which many of them have done and beyond, then include expenses related to the cost of college and graduate education. On the other hand, consider too that many CPAs also have a Ph.D. And then, there are other professionals like retired medical doctors, who have gotten into the tax industry and become very active after retirement. They mostly acquire EA credentials and usually serve clients from the healthcare industry with whom they are acquainted. For all of these practitioners, trial practice and litigation training can come from only two sources - either tutelage under a seasoned tax attorney (or USTCP) or enrollment in a litigation and trial practice program, usually offered by select LL.M. programs that require a J.D., at a cost in excess of $60,000. Whereas the Tax Law Institute is the first and only Tax Court litigation and trial preparation program in the country, established primarily for CPAs and EAs, and developed by a former judge of the U.S. Tax Court to offer Tax bar and trial preparation for under $30,000.
Who Provides More Bang for the Buck?
Now, why have I taken the time to write about the background of these tax practitioners and the expenses related to their training? Because I want to make clear that the best kept secret in the world of tax law, tax litigation and trial practice is the benefits and privileges awarded to those who hold the United States Tax Court Practitioner designation. It is attainable by anyone who has an interest in federal taxation and is willing to take the time to learn about the U.S. tax system and the role of the U.S. Treasury's Internal Revenue Service. From there, it's just a matter of recognizing that if one lives in the United States and one earns a certain level of income, then one is required, under penalty of law, to submit an annual tax return. By doing so, one may find himself/herself challenged by the IRS over their alleged underpayment of taxes, due to mistakenly-taken deductions or the application of credits to which the government deems one is not entitled. Or, worst still, the perpetration of a tax fraud upon the government, under a false filing status, for example. Consequently, a determination is made by the IRS that taxes are owed and notice of deficiency is sent. The recourse for the taxpayer is to pay the deficiency or challenge the IRS. With the latter choice, the taxpayer may self-represent (under the risk of making detrimental admissions and other crucial errors), or if need be and affordable, he or she may retain the services of a tax attorney or an United States Tax Court Practitioner.
The Tax Court Does Not Distinguish between Attorneys and USTCPs... Having the Litigation and Trial Practice Skills is What Matters...
These days, it is fair to say that if a taxpayer is in need of representation (always advised), it would behoove him or her to seek out the best talent he or she can afford. The most bang for the buck comes from the USTCP because they not only prepare tax returns and deal with audits, but with their U.S. Tax Court-approval to practice in and before the Tax Court, they can represent the taxpayer before the IRS, and they can also prosecute a case against the IRS, i.e. go to trial. And, they can do so usually for a lot less money than what a seasoned tax attorney will charge. That's not to say they're going to work for peanuts. They get anywhere from $375-$650 an hour, so they're well-compensated. But they are so worth it, especially to a taxpayer who comes across an USTCP who is well-trained and well-educated in tax law, tax accounting, and litigation.
So, perhaps now you will understand why I believe it is timely to reiterate and update my obscure article about the 'best kept secret'.
Michael Stuart J.D. MPA, Professor Emeritus - Trial Preparation Director at The Tax Law Institute | Student Trial Practice Coordinator at Hawaii LITC | Approved CE Provider at IRS Office of Professional Responsibility | Approved CE Provider of Tax Court Litigation at The Florida Bar
Posted above is a video of a simulated calendar call at the United States Tax Court courtesy of the ABA.
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