To a significant extent, Galler’s exegesis of the ACTC survey reveals lacunae in what is known about the ins and outs of the tax advising process. (The same, of course, could be said for aspects of tax administration, such as private letter ruling requests. Abstruse primary materials seem to breed opaque implementation.) Confidentiality and privacy concerns drive some of these voids. Similarly, revelations in this area tend to involve the very worst actors, as they are caught doing the very worst things. Consider Paul Daugerdas’s early-2000s cover-story in The American Lawyer. Even if everyone is doing it (at least to some degree), the public narrative may capture an extreme. More critically, however, Galler identifies a lack of open conversation about the topic—and a pent-up desire for such conversation. Pushing in this direction—more and better surveys, with critical self-reflection by firms and professional groups—is a central aspect of Galler’s normative prescriptions.
The ACTC survey, as well as Galler’s insightful analysis and recommendations, also implicate various themes associated with the rendering of private advice to clients. For example, Galler’s article highlights a tension between individual and collective responsibility for the quality and content of tax advice. What are the gatekeeping roles of individual advisors, their firms, the legal and accounting professions, and the state? As detailed by Michael Hatfield and others, these roles (and perceptions of these roles) vary over time and across communities of practice. The challenge is guiding this evolution toward the greater good.
In this vein, Galler emphasizes that roughly two-thirds of respondents said that their firms have no record-keeping system to index or catalog tax opinions. As Galler notes, this finding is “remarkable” in an age of increasing digitalization (477) and a threat to the “consistency of positions” within firms (474). But one can imagine salutary benefits to this end of (recorded) history for tax advice. If individuals serve as gatekeepers, then their sui generis legal reasoning may have value, and opinion libraries may deter this type of revisiting. Systematized knowledge also may be more susceptible to drift. If advisors have incentives to be slightly more aggressive than their predecessors, then firms’ advice could skew in that direction over time. Compartmentalizing firms’ historical practices—in hard-copy, spiral-bound deal books, for example—might slow these tendencies.
Another theme in Galler’s article involves formal versus informal control over the advice-giving process. In the ACTC survey, firms split almost evenly in whether they had written opinion-review policies or instead relied on “institutional lore or practice” (474). Similarly, approximately two-thirds of respondents reported that their firms had no tax opinion review committee and provided no formal training on the issuance of tax opinions. Some of these responses may reveal definitional issues: firms without standing opinion committees may constitute them ad hoc, and training may occur on-the-job rather than in conference-room information-dumps. Tendencies to make control more formal may have costs. If nothing else, tax advisors know how to work the rules, and obscuring the role of informal networks may have substantive and distributional effects across the professions.
Finally, the ACTC survey raises questions about the standardization of advice that often has intensely bespoke components. Short-form tax opinions may work best as templates (with back-up memoranda, as needed), but, for me, it’s less clear whether reasoned long-form opinions should include boilerplate caveats and assumptions, or stock representations, or cut-and-pasted analysis. These aspects of tax advice delineate clean “wills” from qualified, and strong “shoulds” from weak. For sophisticated firms and clients, each word may matter; the old Tax Notes parody of opinion standards and percentage confidence carries some truth. As with each of these themes, balance is crucial. And to create an appropriate balance, the first step is to collect more and better data on current opinion practice.
Overall, Galler’s detailed and compelling article provides a rich overview of opinion practice at law and accounting firms. In the wake of court decisions such as Loving and CIC Services, the stakes are high. Galler’s normative suggestions open a framework for important conversation about advice and advising, and her article should be required reading for scholars, practitioners, and policymakers as they consider how the tax professions should be regulated by the state and by themselves.