I am continually amazed that such a small percentage of accountants and tax professionals are striving for or have even become aware of the “United States Tax Court Exam.” Completion of this exam provides a professional with a license to represent an individual or corporate taxpayer in the U.S. Tax Court in a capacity similar to a tax attorney. The designation is referred to as “USTCPm” which is an acronym for “United States Tax Court Practitioner.”
The significant opportunity is that the accounting and/or tax professional can achieve this accomplishment without going to law school for three years. In order to attend law school for a normal three-year term, there are significant out-of-pocket costs; also, the opportunity costs of not working while attending classes must be considered.
The USTCP achievement is accomplished by preparing for and completing a four-hour bar exam that is given every other year in November, at the United States Tax Court building in Washington, DC. The next exam will be in November of 2014, so you can start getting your goals in mind and begin preparation and establishing a plan for completion.
NAME: Dean Johnson
TITLE: CPA, United States Tax Court Practitioner (USTCP), Enrolled Agent, MBA
ORGANIZATION: CPA practice in Albuquerque, and currently forming Tax Court Solutions LLC, a regional tax resolution firm
If you are an accountant or tax professional such as a CPA, EA (Enrolled Agent), or RTRP (Registered Tax Return Preparer), and are considering law school to become a tax lawyer, there is a viable alternative that may not be as time consuming or expensive. Take the Tax Court exam and achieve the USTCP designation so you will have the authority to represent taxpayers in the United States Tax Court in a controversy against the IRS.
The potential beneficiaries of this opportunity are:
⋄ Accounting firms that might want to sponsor a key partner or employee for it.
⋄ College business students interested in accounting and taxes that might want to view the path of the USTCP as an alternative to going to law school to enhance their level of expertise.
⋄ Tax resolution firms which mainly resolve conflicts with the IRS that might encourage an employee or principal to consider it.
⋄ A sole proprietor or small firm that might may want it to gain a competitive edge.
I hope that college business professors, accounting firm partners, tax resolution firms and the various professional organizations get the word out to their associates, partners, employees and members that there is an opportunity available such as the USTCP.
Please understand that with the USTCP, the successful candidate cannot use the lawyer or attorney title, but once an individual passes the exam and is admitted to practice before the United States Tax Court, they get assigned a bar number just like an attorney.
Also, the USTCP cannot practice law similar to an attorney preparing wills or contracts; the only venue where a USTCP can represent a client/taxpayer in a legal capacity is in a controversy with the IRS in the United States Tax Court and providing advice during the controversy.
Further, it should be mentioned that the majority of Tax Court cases are settled before they go to trial. More than 90 percent of the cases never go to trial; however, you must be prepared in the event a settlement is not reached.
Contents of the exam
The contents of the exam are clearly spelled out at www.ustaxcourt.govas follows: “The examination consists of the following four parts and is designed to test the applicant’s knowledge of these subject areas:
(1) the Tax Court Rules of Practice and Procedure.
(2) Federal Taxation.
(3) The Federal Rules of Evidence.
(4) Legal ethics, including the Model Rules of Professional Conduct of the American Bar Association.
Four hours will be allowed for the test. To pass, the applicant must demonstrate proficiency in each subject area by obtaining a score of 70 percent or greater on each of the exam’s four parts.
The real back breaker of the exam is Part 3, titled Federal Rules of Evidence. It is necessary to be familiar with the rules and be able to cite such rules from memory as there are no reference materials available during the actual exam for this section. Further, one must be able to apply the rules to a typical tax court trial and related questions about the admission of evidence, objections and procedures in court.
Books are provided to assist the applicant during the exam for each of the other three parts, but for the Part 3, you must work from memory and apply it in a case situation.
Legal Ethics and Tax Court Rules of Practice and Procedure are fairly straightforward and basically open book. The Federal Income Tax portion is the longest part and covers a broad base of information making it the second most difficult part.
The exam costs $75 to be paid with the application and you have to get to the Tax Court building in Washington, D.C., to take it. Further, it is necessary to purchase various text books on legal evidence and consider a review course. The next exam is in November 2014. The United States Tax Court will announce the date and begin accepting applications approximately six months before the exam.
In 2008, approximately 75 individuals took the exam and eight individuals were successful. The pass rate over the last decade has been between 5 percent and 10 percent.
Exam a gateway to Tax Court practiceNAME: Dean JohnsonTITLE: CPA, United States Tax Court Practitioner (USTCP), Enrolled Agent, MBAORGANIZATION: CPA practice in Albuquerque, and currently forming Tax Court Solutions LLC, a regional tax resolution firm