The last time Congress undertook a major overhaul of the tax laws, it spawned a surge in legal and law-related employment opportunities for attorneys. That was 31 years ago. When that bill became law, virtually every BigLaw and many smaller law firms bolstered their tax practices with new hires.
This time around, should Congress actually enact the aptly named Tax Cuts and Jobs Act, you can bank on it that history will repeat itself. This phenomenon has occurred every single time a major tax bill has become law.
The 429-page behemoth of a bill, at this writing, passed the U.S. House of Representatives and has been sent to the Senate floor by the Senate Finance Committee, is, like all tax bills, ridiculously complex. Add in the bevy of implementing and explanatory issuances to come out of the Treasury Department and Internal Revenue Service if this bill becomes law. The dense, ponderous (and traditionally hastily and badly written) pages of documentation that lawyers will be called upon to interpret and clarify for their clients will number in the thousands.
Moreover, this omnibus bill’s wide range encompasses a great many changes to the way in which individuals, businesses, and nonprofits* will be taxed. Virtually every U.S. entity and citizen will be affected in some way.
Despite a lot of bombast by members of Congress and the President to the contrary, this bill by no means simplifies the tax code. On the contrary, it does what all prior tax legislation has done—it complicates it. That is invariably good news for attorneys.
It will take years for any tax overhaul to be incorporated into the daily doings of affected parties, so the host of new job and business opportunities created by it will also include a decent dose of job security.
*While nonprofits generally are not subject to taxation, enough exceptions have been carved out that some even have tax departments (most still rely heavily on outside counsel for tax matters and advice). The current bill under consideration significantly changes the way higher education institutions are taxed, primarily by subjecting certain activities to taxation for the first time.
Note: Most large companies, e.g., the Fortune 500 and large private corporations, have tax departments populated by attorneys and accountants that are separate and apart from their in-house counsel offices.