TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Monday, January 24, 2005

Black & Black on A National Tax Bar


Katherine D. Black (Southern Utah, Business School) & Stephen T. Black (Franklin Pierce) have published A National Tax Bar: An End to the Attorney-Accountant Tax Turf War, 36 St. Mary's L.J. 1 (2004). Here is the Conclusion:

Taxation is a field that is so pervasive that its effect is felt by practically all people. In fact, the ramifications of taxation can be so devastating that they can literally destroy businesses and disrupt families. Superimposed upon the monetary effects of taxation, are the potential criminal penalties for willful failure to comply with a maze of complex and practically unintelligible rules.

Despite the critical need for competent, professional help in the area of taxation, the current state of tax practice is confused, virtually unsupervised, and without definite standards for practitioners. [FN679] Accountants who do a great deal of the tax practice in this country have refused to create a certification that would protect the public and ensure a high level of competency among practitioners in the area of taxation. Despite their reluctance to demand a high standard of competency, they have begun to move into additional areas of "law" in an effort to expand their practice.

The state courts have said that the practice of tax is the practice of law, and as such is subject to its supervision. Presumably, these decisions establish the law that only lawyers can practice tax, but these holdings are flaunted and not enforced. Further, enforcement would bring about chaos and be to the public detriment, as there are not enough lawyers to do the work done by accountants. The federal courts are split on the issue, but generally hold that the practice of tax is the practice of accounting, even when performed by an attorney. Generally, their rulings are not so much an analysis of whether tax is the practice of law, as they are an effort to limit the use of an accountant-client privilege. Thus, although the states hold the practice of tax is the practice of law, the federal courts generally hold that the practice of tax is the practice of accounting unless it involves a criminal prosecution. Accountants practicing tax, however, do so under the threat of prosecution for the unauthorized practice of law under state law. Since there is no one else to do a job that is in such critical demand, this threat of prosecution is an unfair burden to put upon the accounting profession.

It is time for the legal profession to set realistic standards ensuring the public welfare in terms of providing both sufficient and competent tax assistance. This can be done by creating a new classification of professionals who must meet standards of competency in the areas of taxation and who are supervised by the courts.

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