Faculty Memorandum on Tax Law
Updated September 2011
Faculty: Richard Hyland, Michael Livingston, Patrick Ryan
Adjunct Faculty: Brenda Eutsler, Herb Hinkle, Cory Jacobs Russell Stewart
Each year we offer the basic tax course, Introduction to Federal Income Taxation, as well as several upper-class tax electives. Among the electives offered from time to time are Corporate Taxation, Trusts and Estates, Estate Planning, International Taxation, Partnership Taxation, State and Local Taxation, Tax Practice and Procedure, Taxation of Business Entities, the seminars in Tax Policy and Income Tax Planning.
We strongly recommend that all students take Introduction to Federal Income Taxation, even though it is not required for graduation. No matter what area of law you choose to practice in, you will likely be exposed to tax issues. This course offers a general introduction to the governing statute, the Internal Revenue Code, as well as the Treasury Regulations promulgated pursuant to it and the policy questions that pervade the tax field.
Q. I am not planning to practice as a tax lawyer. Are there any tax courses (in addition to Introduction to Federal Income Taxation) that I should consider taking?
A. If you plan to engage in the general practice of law, Trusts & Estates should be your first choice. Every lawyer in general practice must know the basics of planning for family gifts, drafting wills and trusts for family members, and drafting shareholder agreements for family businesses. These transactions are largely driven by the Federal estate and gift taxes and the Federal generation-skipping tax.
Your next choice should be Taxation of Business Entities. This new course is designed expressly for students who do not plan to practice as tax lawyers but who do foresee a general, family-oriented practice that may involve planning for family businesses. The emphasis is on making the basic choices among the available legal entities: regular taxable corporations, S corporations, general partnerships, limited partnerships, limited liability companies and limited liability partnerships.
There is a "tax tail" on virtually every legal "dog": The personal injury lawyer must know whether compensatory and punitive damages for personal and property injuries are taxable and whether it would make sense to enter into a "structured settlement agreement," not to mention whether the legal fees are deductible. The lawyer specializing in family law must know the tax aspects of property settlements, child support and alimony, not to mention, again, whether the legal fees are deductible. The lawyer representing a closely-held business or tax-exempt entity should know the basics of the taxation of entity transactions. The lawyer with a client who wants to make a substantial charitable contribution, such as a farmland preservation easement, should know at least the basics of how such a gift might be structured to obtain the maximum tax advantage.
Q. I am planning to specialize in tax. What courses and what sequences, should I consider taking?
A. Your first choice should be Corporate Taxation or Partnership Taxation, depending on which is being offered in the spring of your second year; then you should take Estate Planning in the fall of your third year; and, finally, Corporate Taxation or Partnership Taxation in the spring of your third year. These courses total 6 credits, and they offer a more in-depth look at the taxation of the entities available for structuring a business. Corporate Taxation includes coverage of mergers and acquisitions which is omitted from Taxation of Business Entities. Partnership Taxation includes more in-depth planning for regular partnerships, LLCs, LLPs and S corporations that can be covered in Taxation of Business Entities.
Elective tax courses, beyond these basic offerings, depend on your interests and what may be offered from semester to semester. Business Planning focuses on the analysis of problems that arise in typical business transactions; and it includes practice in the drafting of supporting documents. Employee Benefit Law focuses on the tax aspects of qualified plans: IRAs, Roth-IRAs, pension plans, profit-sharing plans, and employee stock ownership plans (ESOPs). Tax Procedure & Tax Fraud focuses on the penalties for late filing, failure to file, erroneous filing (both negligent and intentional) and on the procedural aspects of tax audits and tax litigation, both civil and criminal.
Q. Can you tell me a bit about the other elective tax courses you have listed above - even though there are no definite plans to offer those courses?
A. Yes. International Taxation covers both the taxation of foreign nationals receiving income from U.S. sources as well as the taxation of foreign branches and other entities (and individuals) doing business or investing abroad. The Seminar in Tax Policy focuses on the broad tax policies - fairness, efficiency and simplicity - that underlie our tax laws and how those policies are (or are not) reflected in the actual tax bills that are signed into law; as well as on the procedural aspects of tax policy - the legislative and judicial structures for enacting tax laws and resolving tax disputes. The Seminar in Income Tax Planning can be thought of as the flip-side of tax policy; students analyze the risk and return in a series of typical tax planning problems - basic securities investments, cash value life insurance, qualified plans, real estate investments, low income housing, prepaid tuition plans, and security derivatives. State and Local Taxation covers not only the basic issues of valuation and jurisdiction (overlap between states) but also the use of tax reductions as incentives (to locate a business in a particular jurisdiction). Advanced Corporate Taxation covers a number of topics not included in the basic Corporate Taxation: the accumulated earnings tax; collapsible corporations; personal holding companies; and the consolidated tax regulations.