In explaining what a tax lawyer does that other representatives cannot do, it is helpful to understand what is meant by a legal issue. Legal issues are developed from expert creative analytical, interpretative, and technical research skills.
Technical research includes: determining Congressional intent from the legislative history of the tax law; a search and analysis of the provisions of the Internal Revenue Code; Treasury tax regulations; IRS revenue rulings, private letter rulings and procedures; IRS internal practice procedures and audit guidelines; case law; tax treatises; and tax articles.
A taxpayer representative must have the skill and experience to identify and interpret the applicable tax law and also find ambiguity and inconsistency in the law to protect a taxpayer from erroneously overpaying a tax liability. The same legal skill may be used to identify the tax law that will support a legal argument in favor of a taxpayer position.
Tax law is based upon legislation passed by Congress. No tax statute is comprehensive and complete. Congress cannot think of every issue that could arise under tax legislation and draft a comprehensive legislative answer for all potential technical issues.
All words have ambiguity. Hence legislation needs to be clarified. Tax law may be interpreted within the context of the statute or related tax statutes. The language of a statute may be interpreted by language in the reports of Committee on Ways and Means of the House of Representatives, the Senate Finance Committee, or the Joint Tax Committee. Legislative intent may also be discerned from Congressional debate or colloquy.
The language of a tax statute is further applied and interpreted by tax regulations drafted by the Treasury Department. Treasury regulations have significant ambiguity and require clarification. The IRS issues revenue rulings, private ruling letters, technical advice memoranda to District directors, procedures, guidelines and notices - all designed to clarify the tax law but in turn may be ambiguous or inconsistent.
Tax issues are litigated in the Tax Court, the Courts of Appeal, the Claims Court and the Supreme Court. Some issues have judicial precedent and others do not. Other than the Supreme Court, many courts come to opposite and conflicting decisions. All court decisions are limited by the facts and the legal issues in each instance - those distinctions raise interpretative issues.
The fact that tax law is complex and arcane is well known. This complexity is he reason a qualified tax attorney is in a superior position to protect a taxpayer from overpaying a tax liability - provided that attorney has strong creative, analytical and interpretative skills.
Interpretative and analytical skills involve the sophisticated ability to read tax legislation, regulations, cases and other authority to identify subtle distinctions, ambiguity or supportive facts, issues, and argument.
Interpretative and analytical skills are creative when they identify unique authority and argument and ascertain the persuasive law and argument that permits a taxpayer to beat the IRS or reduce tax liability.