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Euroguy18

Tax Law and Math?

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In my experience, you do not need more than basic arithmetic to be a tax lawyer or a tax accountant.  Sometimes you might run into slightly more complicated calculations such as bond yields, internal rate of return, etc.  But those are to be handled by the computers.  The important thing is to understand the concepts.  Having an accounting background is helpful to a tax lawyer, although it is by no means required.  For example, I was having a discussion last week with two other lawyers on s.104(13)(a) of the Income Tax Act .  We were talking about how the capitalisation of trust’ income is not expressly addressed in the Act, but can be inferred by the said subsection.  A lawyer with no accounting or finance background was having a difficult time to grasp the idea at the beginning as he is not familiar with trust accounting (a branch of accounting which is a bit different to the usual accounting for corporate entity).  But all it took was a 2-minute precise and clear explanation, and he fully understands the thing now.  These are not rocket science.  Sometimes you just need a colleague with good communication skills who is willing to share knowledge and experience.  

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3 hours ago, Euroguy18 said:

This reminds me of a similar question I have regarding a tax avoidance/estate planning/asset protection practice. Would such a practice be confined to the major Canadian cities (I.e., Toronto, Montreal, Vancouver, Calgary)? Would other fairly large (mid tier) cities like Edmonton, Winnipeg, etc. have a decent market for such services? 

 

My view is that there is a market for tax planning in all high tax jurisdictions, big or small.  People and corporations in Edmonton and Winnipeg, too, do not like paying more taxes unnecessarily.

The bigger issue is that the whole industry of tax planning, especially from a global perspective, has been under tremendous pressure in recent years.  FATCA, CRS, economic substance, registration of local situs assets in the UK and France, the list goes on and on....  Basically the major authorities are coming up with something brand new every couple years to hurt us.  To a point where I am convinced that they want to wipe us out altogether.   I am just glad that I am on my way out of this business.  And I have been telling young lawyers interested in tax to think twice before getting into tax planning; perhaps a focus on tax litigation will make more sense.  

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10 hours ago, Porkypig said:

 And I have been telling young lawyers interested in tax to think twice before getting into tax planning; perhaps a focus on tax litigation will make more sense.  

Well that's disheartening.

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On 6/7/2019 at 5:53 PM, Euroguy18 said:

Hey everyone, 

I'm curious to know how relevant math skills are for the practice of tax law (tax litigation and/or tax planning). Tax law is a field that could potentially interest me going forward, but I feel that my arts background might limit my ability to succeed in this particular area of the law. 

If one doesn't have a business or economics degree, how would this impact one's chances for succeeding in tax law courses in law school and successfully practicing tax law as a lawyer? 

Is a business/economics/accounting background a necessary condition for the practice of tax law? 

There are three types of tax lawyers. Those that are good at math, and those that are not. 

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On 6/11/2019 at 1:22 AM, Porkypig said:

I am just glad that I am on my way out of this business.  And I have been telling young lawyers interested in tax to think twice before getting into tax planning; perhaps a focus on tax litigation will make more sense.  

I think that is a little overblown. I think there are fewer plans out there to be able to go to a client and say 'I can save you X in tax' but it's an increasingly uncertain world and tax advice at the planning stage is more critical than ever, so I think planning is increasingly moving into here's how to avoid/reduce audit risk, or compliance burdens, etc. rather than "So there this Island, filled with Men..." stuff.

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Posted (edited)

I've worked in both a law office (as an articling student) and now an accounting firm (as a manager) and the most math I've done was figuring out how many hours I need to bill a day to hit my targets if I take all of my vacation time.

Edited by Skweemish
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On 6/8/2019 at 5:29 PM, setto said:

Can you chime in on a good answer for the accountant or CPA responsibilities vs those of a tax lawyer? 

We're all wondering the same thing.

On 6/8/2019 at 6:41 PM, Lolo246 said:

I think it depends on what you want to do in tax law. If you want to legislate policies, then no, I don't think you need to be good at math. However, if you are doing estate planning or anything related to trusts, from what tax lawyers have told me, it is better to have a business/accounting background. A CPA does similar work to a tax lawyer from what I understood based on my inquiries. Having your CPA designation will make you a much stronger tax lawyer as will experience in audit (I do not really understand why the latter is so). A CPA would do the income-tax filling whereas the lawyer would do the memos and paperwork. There is a lot of overlap though (also, I am speaking about differences at the partner-level). Tax lawyers may work at accounting firms but CPAs cannot work at a law firm. So, overall, you will be a much stronger tax lawyer if you have an accounting background but it is not a necessity to pursue tax law. It may also depend on your individual strengths and how fast you can catch onto things. 

Disclaimer: this is all based on what I was told by tax lawyers and CPA tax accountants. 

^- actually a really good summary.

On 6/11/2019 at 1:22 AM, Porkypig said:

 

My view is that there is a market for tax planning in all high tax jurisdictions, big or small.  People and corporations in Edmonton and Winnipeg, too, do not like paying more taxes unnecessarily.

The bigger issue is that the whole industry of tax planning, especially from a global perspective, has been under tremendous pressure in recent years.  FATCA, CRS, economic substance, registration of local situs assets in the UK and France, the list goes on and on....  Basically the major authorities are coming up with something brand new every couple years to hurt us.  To a point where I am convinced that they want to wipe us out altogether.   I am just glad that I am on my way out of this business.  And I have been telling young lawyers interested in tax to think twice before getting into tax planning; perhaps a focus on tax litigation will make more sense.  

Or focus on indirect tax.. some have said it's the "sexy" tax.

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1 hour ago, MT696 said:

We're all wondering the same thing.

^- actually a really good summary.

Or focus on indirect tax.. some have said it's the "sexy" tax.

😉

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I can't speak for tax law, but I can speak a bit about accounting. Basically no accountant does difficult math per se. However, accountants do need good numerical sense (the ability to figure out how changes in certain figures will affect different ratios; the ability to read, understand, and infer information from financial statements; etc.). I don't think this is especially challenging stuff though; most law students I know (even the ones who swear up and down that they hate math or are bad at it) can, I'm quite certain, pick this skill if they need to with a bit of practice.

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