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Presented by the American Bar Association’s Law Student Division, the ABA Law Student Podcast covers issues that affect law students, law schools, and recent grads. From finals and graduation to the bar exam and finding a job, this show is your trusted resource for the next big step.
Todd Berger (00:00):
On this show, we've sought to highlight just how ubiquitous the law is, and as a result, just how many opportunities exist for lawyers looking for a niche that suits their interests, their skills, and their passions. While this means the law offers exciting specializations and often underexplored corners in which to make your career, you don't need to look too far to find a need that you can serve. As the phrase goes, it's impossible to be sure of anything but death and taxes. Yet, in spite of its inevitability, tax strategy remains one of the most misunderstood and underutilized tools in litigation. On today's episode, we pull back the curtain on the world of tax planning and structured settlements. We discuss how tax attorneys collaborate with trial lawyers behind the scenes, look at the key differences between tax litigation, consulting, and estate planning, and explain why understanding basic tax principles is essential for any lawyer who wants to better serve their clients.
(00:59):
This is the ABA Law Student Podcast. Welcome back everyone to our new season of the ABA Law Student Podcast. We're excited to dive right in for another series of episodes, helping you explore career opportunities, finding new passions, and making the most of your time in law school. We are also excited to welcome our newest student co-hosts, so let's jump right into that. Charnese, glad to have you on the show with us today for the rest of the season. And real quick, before we get into our episode, why don't you tell us a little bit about yourself?
Eve Albert (01:45):
Hey, Todd, my name is Charnese. I am from the Dallas area. I go to UNT Dallas College of Law as a second year law student, and I am interested in family law and employment law because I wanted to help fathers get custody of their children, fun fact about me.
Todd Berger (02:04):
Great. Well, it sounds like you have some really interesting passions and decide what you want to do in the law. That's terrific. So it's great to have you with us and we're really excited to have you here and we're looking forward to the episodes that you're going to be producing with us. So speaking of episodes, let's turn to today's subject. Hello again, Eve, and welcome back. I hope your school year is off to a great start. Yve, why don't you tell us a little bit about what today's episode is going to entail, who we're going to hear from, what we're going to talk about.
Charnese Ballard (02:35):
Yeah, absolutely. So today we're talking to Jeremy Babener. He is a tax law expert. He's a friend of the ABA and we found him there, but a little bit about him, he went to NYU for his JD and his tax LLM. He spent part of his career as a litigation clerk at the Department of Justice. He was a tax policy fellow with the US Treasury and he practiced as a tax and business attorney. Now he works as a tax and settlement consultant. So he has seen tax law in all stages of the process and in all different areas that lawyers can practice in. So I wanted to do this episode. I though it would be interesting. I think that a lot of law students share the opinion that tax law is a little bit intimidating to get into, but it also, as we'll hear from Jeremy about, it's also something that's really important.
(03:33):
It's one of those areas that touches everything. So I thought that it would be good to give law students that information and give tax law a chance. And maybe listening to this episode, you'll find that you might really be interested in it. So yeah, it's a really good episode and I'm excited to get into it.
Todd Berger (03:52):
Well, that's great. I've never practiced tax law, but I actually have a lot of opinions about it, but we'll get into all that after we hear our interview with Jeremy. Perfect. Great. Let's get into it.
Charnese Ballard (04:08):
I'm really excited to talk about your career, specifically tax law. I think that there's a lot of misconceptions about tax law between law students, so I'm excited to clear some of those up, kind of talk about the area and some things that are exciting about it. So if you don't mind, would you just tell me how you got to your career now, what your career path has been and what your current role is?
Jeremy Babener (04:32):
Okay. Getting to where we are now, there were quite a few turns. Originally I thought I would probably be a trial lawyer. And when I went to NYU Law, my 1L summer, I clerked with. I was actually heading to civil rights division and I interviewed with a lead litigator in the Federal Tort Claims Act section, which handles all of the defense for the United States, everything from VA medical malpractice to malicious prosecution, the FBI, things like that. And her name's Gail Johnson. She's just the greatest mentor of all time. She just convinced me very easily how substantive of an experience I would have in her office and she very much made that true. When I was there, we started running into what's called a structured settlement, which is the agreement to receive payments over time rather than as a lump sum.
(05:41):
I was interested in that, thinking I'd be a litigator, but when I returned to NYU, the course I was signed up for was canceled and I ended up signing up for a tax policy seminar and decided to write about the tax issues and why structured settlements are used. As I did so, I started interviewing lawyers and financial advisors around the country. They very quickly said to me that they didn't have a very good understanding of some of the technical and strategic considerations. And before I had even finished writing my article, which turned into a couple articles, they were calling to ask if I could advise them on settlements. I was already headed to a Northwest law firm, a mid-size firm, Lane Powell, and the tax attorney there or the chair of the tax group there, I asked him if we could be advising even while I was in law school with him as the attorney and me as acting a little bit like a summer associate.
(06:43):
We started doing that and by the time I graduated, we were already working with a number of plaintiff firms around the country. I ended up staying on at NYU to get a tax LLM. They had a program, a fellowship that allowed me to go and serve as a fellow in the US Treasury's Office of Tax Policy where we were doing a lot of really sophisticated partnership and M&A type tax work, but I was also able to continue my learning about plaintiff work.
(07:16):
When I came out of that and started at my firm, we were already kind of advising plaintiff firms around the country, and then half my time was just doing general tax work for a mid-size firm, so everything from transactional to real estate and so forth. At that point, we began or I began using a lot of the transactions and strategies from general corporate and business work in the plaintiff world. At a later point, I actually ended up creating my consulting firm. The main reason for that was that we were regularly asked to vet and review arrangements that plaintiffs and plaintiff firms use at settlement. Sooner or later, we were starting to be asked to create new arrangements and doing that through a consulting firm offers a lot more flexibility and also the ability to partner with businesses and financial advisors and so forth on that.
(08:14):
And so now I left that firm, I have my own law firm and my own consulting firm where we either through the law firm, we're giving legal and tax advice to plaintiffs and plaintiff firms, and through the consulting firm, we partner with financial advisors and institutions and others to either improve or create and educate on those kinds of arrangements.
Charnese Ballard (08:41):
I do want to talk more about structured settlements. Are these arrangements on a case-to-case basis? Are you looking at a case from start to finish and then adjusting whatever the settlement frequency of payments or. I don't know the terminology for it, but are you involved in these cases from their start? At what point do you get brought in?
Jeremy Babener (09:07):
So usually I am brought in once the plaintiff firm realizes or thinks that this is moving towards settlement. If you think about any time that a large amount of money is about to change hands, there's different ways that it can change hands. You could pay it as a lump sum, you could pay it to a third party that will distribute it over time, you could put it in a trust. There's a lot of different things that can be done. One of those is to use a structured settlement. In general, what that looks like is that the defendant will agree to make payments to the plaintiff on a schedule. In general, the plaintiff can kind of choose the schedule. The defense then pays a lump sum to an annuity company like MetLife. MetLife then will make those payments to satisfy that schedule over time. And so in fact, when the schedule is being created, it's usually a financial advisor or a settlement planner who is working with the plaintiff and the annuity company to identify what is the right schedule of payments.
(10:15):
As the tax lawyer, I'm making sure that the transaction is sound and is effective for tax purposes. There are tax subsidies available, there's deferral available. So that's kind of what I'm doing. And there are a number of other kinds of strategies involved. The settlement language itself, even if you're not using a structured settlement, can greatly impact how much the plaintiff keeps of the amount that the defense pays. So that's kind of more my role unless I was actually helping to create the arrangement itself. And so the actual schedule though is very much ad hoc. It's case by case. It's very much customized and tailored to the individual plaintiff.
Charnese Ballard (10:58):
Okay. But you are communicating with these different moving parts. Are you communicating with the plaintiff side and the defense side and the annuity companies?
Jeremy Babener (11:08):
I would say maybe half the time I am communicating with the other side. Structured settlements have become very, very common, and so many defendants and casualty carriers, which are the insurance companies that are making the payment for the defendant, they are used to the concept of a structured settlement, so they often don't need convincing. Now, there's a little bit of selective process here. I am definitely called in on cases where there's some kind of nuance, something odd, or there's a question involved. The proportion of cases that I see where there is a little bit of an oddity is much higher than in the overall number of cases because I'm getting called because there's an issue. And so that's why I might actually be speaking to the defense half the time. If I was called on just your general everyday case, then I think the percentage of times where I would be talking with the defense is probably less than 5%.
Charnese Ballard (12:10):
That makes sense.
Jeremy Babener (12:11):
You asked when. So often the plaintiff firm knows that they might've already had one mediation. The first mediation typically does not result in a settlement. Both sides are posturing and maybe trying to find out what are the strengths of the other side. Each side is saying, "Oh, I'll be willing to move in your direction if you show me that if you have a reason for me to do so, what's your best evidence?"You're kind of feeling out the other side and the plaintiff side is often really either saying, "Okay, we're ready to negotiate and settle," or they're saying, "Hey, we're not looking to settle unless you're already at this level because we look forward to the trial." So this is just a negotiation. I've actually moved a little bit into the world of just serving as settlement counsel where I'll negotiate the settlement itself or serve as lead counsel in mediation.
(13:20):
That's a little bit of a different role than it has been my primary role in the past, which is more behind that lead counsel and providing them with strategies and talking points and so forth.
Charnese Ballard (13:32):
So you're not the plaintiff's lawyer, you're not their direct counsel, but you're being consulted. How do you get these plaintiff's attorneys, and I'm assuming the clientele as well, how do you get them to trust you with their finances? Because I feel like people tend to be very protective over their money. They're kind of giving you access to a lot of information by bringing you in. Is that an issue that you have encountered or is it not something that people really worry about? Not
Jeremy Babener (14:03):
Really. I write, I speak, and I work on a lot of cases that are pretty well known. Also, a lot of trial lawyers who handle very large cases, a lot of my cases just come through referral. A trial lawyer will email on their listserv and say, "Hey, we know we need a tax lawyer. Can you recommend someone?" And so I'm often called through that. There's only a few of us, a few tax lawyers in the country who really specialize in this area. So if you were to Google tax lawyer for settlements, I'd probably be in the first couple hits, but also I just write a lot and speak at all. I'm regularly invited to speak at trial lawyer conferences where trial lawyers are learning about this stuff. And I also speak a fair amount about legal ethics, and so this kind of stuff, it gets around.
(15:00):
Also, trial lawyers are not finance people, they're not tax people, and they don't want to be. And they're also very good at finding experts because trial lawyers need a doctor expert, a medical expert to testify.
(15:16):
They need all kinds of experts to testify. They know how to find experts and they know their limitations. They are the fighter. They are not the financial planner. And so it's usually very comfortable for them to say to their client, "Hey, I'm not the tax lawyer, but I've found a top person who specializes in this area. I'd like to get you on the phone with him." In terms of privacy and personal information, I'm co-counsel. I'm engaged as an attorney along with the trial attorney, so everything's going to be privileged there. I suppose when it comes to private information, we're certainly talking about their current existing financial information. It's relevant to know what they're making today because that tells us the tax rate even before they settle. But I suppose it is also probably helpful that what we're really focused on is the money that they could make, and so that might make it a little bit easier.
(16:18):
I don't think that we ever really run into that as an issue. And you can imagine that before they start sharing their very private information, we're usually having an initial conversation where they get to ask some questions and I've learned about the case from the trial lawyer, so I'm already giving some thoughts on the kinds of advice that I would be giving. So you establish that trust very quickly.
Charnese Ballard (16:41):
Okay. Interesting. So before you got into consultation, do you think that's more a foreseeable issue for just general tax lawyers or no?
Jeremy Babener (16:54):
So first, so I do wear two hats through my law firm serving as a tax lawyer, and I'll jump in on a case. Through my consulting firm, I'm really more. I'll serve as a consultant to a financial advisor or an institution. I might, as a consultant, jump on where I might speak with an individual client, but with them, we always make it very clear we can't be your lawyer. And we'll often, if we're serving in a consulting capacity, we'll recommend that they actually find someone who can serve as a lawyer. So that's kind of a different type of conversation. But when I'm serving as the tax lawyer jumping on, the client at that point has been working with a lawyer probably for more than a year, preparing their case, getting ready for depositions and so forth. I think most tax lawyers in general, and there are a few different types of tax lawyers, and so the relationship they'll have with client's a little different.
(18:02):
One type are tax controversy lawyers. Those are the attorneys who really are litigators. They will, if the IRS or a state Department of Revenue is auditing someone, a tax controversy lawyer is the lawyer you would call to represent you, essentially arguing with, litigating with that government body. I've done that work, not something I do on a regular basis, and I haven't probably done it for at least maybe seven or eight years. So that's one type of work, and there the relationship really is just like with a plaintiff, it's litigation. Another is estate planning work, which some estate planners will probably style themselves, think of themselves as tax lawyers, especially if they are handling sophisticated, high value estates. There's a lot of tax. I mean, estate tax is its own body, and you're not just thinking about estate tax, you're also thinking about income tax, and there's all kinds of different arrangements and trusts, understanding taxation of nonprofits, grants and so forth is very relevant.
(19:18):
So they're the tax lawyers probably talking with probably a fairly high net worth couple or individual, and they are sought out for both their tax knowledge and also there's a fair amount in estate planning that has nothing to do with tax. This is your medical directive, how your will is going to be set up or a trust is going to be set up for your children, things like that.
(19:48):
And then there are the tax planning attorneys who are advising individuals or advising businesses or both, and they're advising on a daily basis, but day-to-day things that come up, "Can I deduct this? Is there a better way to form the company or to pay out compensation?" And some of that group are the sophisticated tax planners who really have to know the pretty broad range of taxation. Taxation is very broad because every time money changes hands, tax is potentially relevant. In fact, anytime value changes hands, tax is relevant. And so the tax body of law governs all types of entities, all types of practices, all types of services, all types of assets. So you can specialize in any one of these, but if you're going to be doing planning, you have to have a pretty good sense of many or most of them so that you are catching issues.
(21:01):
And that's why being a tax lawyer does require,
(21:06):
Especially in the early years, a lot of invested time in learning, reading daily updates because there's updates from every federal district court and the IRS in addition to your state. So there's a lot to know. But after, I'd say, three to five years of practice, you've kind of touched if you have a general tax practice. I was at a firm that had the tax group was advising all the different areas, and so after three to five years, we touched on, or I personally touched, most of the key core issues. And so when someone comes to me, I might not know the specific answer, but I will have a good sense of, is it likely that we're going to find the right answer? Is it likely that this is the kind of thing where we can mitigate a problem or find an opportunity? And so there's something of a generalist within taxation that you build up as a planner.
Todd Berger (22:15):
We'll be right back.
Charnese Ballard (22:25):
Okay. So for law students that know they want to go into tax law, but they're considering what area to go into, if you want to be client facing or working with a company or similar to what you do, advising plaintiff's attorneys or working with clients like that, doing tax planning would be a considerable option. Those people are working consistently and they are the ones that have to stay the most up to date on the information, whereas tax controversy is truly on a case-to-case basis. It's basically the tax version of being a plaintiff's attorney or a defense attorney. And then estate planning, which I am partial to. I love estate planning. The tax issues are definitely complicated for me. I've never been big on math, but estate planning work is also an option for law students out there who might be interested in going into this area.
Jeremy Babener (23:24):
Yeah, and I would say I'm not much of a math person either. What? Tax law is not a math situation. That's accounting. Tax law is strategy, language interpretation. What you'd asked me about authorities, what does the federal tax code say? What do the IRS regulations say? What do the federal courts and the US tax courts say as they interpret the regulations and the code? Then there's just the general practice, what's happening in the industry, and then there's as you are negotiating who is going to be responsible for different liabilities or different things between parties, that's what the tax lawyer does. Now, do I end up needing to use Excel and run through different projections and things like that? Yes, I do. I learned that on the job and just from tinkering around, to be honest, you don't need a lot there. You can teach yourself, but I certainly have learned from some really great colleagues how to make it look pretty so that not only am I looking at my own numbers, but I can send it to the client and not just be entirely embarrassed by a ridiculous just mishmash of numbers on an Excel workbook.
Charnese Ballard (24:48):
Okay. So for those of us that are bad at math, not all hope is lost.
Jeremy Babener (24:52):
No, not at all.
Charnese Ballard (24:52):
There's a workaround. Okay, great.
Jeremy Babener (24:54):
Yes, certainly. Yeah. And the estate planning, I would say, if you're the vast majority of estate planning folks, they do not need that super sophisticated tax knowledge because most estates, not to get too political here, but you hear about the death tax and the estate tax. If you look at any of the numbers, it is such a teeny, teeny, tiny fraction of estates in this country that ever need to think about the estate tax. It's just not relevant because we're talking about $15 million per individual. A couple is 30 million. You don't need to think about workarounds unless you have that kind of money, and most people don't have that kind of money.
(25:36):
Now, there are states that have a one or a $2 million threshold, and so potentially you're going to have a number of estates like that, but even for those, the strategies that you're going to use are not the super sophisticated ones. And even if it would benefit the estate to use a strategy, think about how if you're only going to save, let's say a strategy is going to save you 2%, 5%. If you're talking about a million dollar estate and you wouldn't be here, but if you are, well now look at the cost, not only for your lawyer, but to set everything up. It's just not worth it. If you've got 30 million, $50 million, okay, if you save 5%, we're really saving real dollars here. So okay, now you really need that sophisticated thinking.
Charnese Ballard (26:33):
Okay. Well, that kind of leads me into something I wanted to mention. So if you are a law student and you're really into estate planning, you don't need to necessarily have a background or experience in tax law, but it can give you a leg up, which -
Jeremy Babener (26:52):
I would say, and actually, I know I'm biased, but I would say this to every law student.
Charnese Ballard (27:00):
That's what I was going to say. Everybody has to pay taxes.
Jeremy Babener (27:03):
Yeah. You should take basic income tax. You really should. It's one of those areas that, think about if two, three years into your work, you are going to start handling things for clients. Clients never know what to do with taxes, and tax is relevant to everything. Anytime you're doing something, tax is relevant. Think of how inconvenient it is when you're having a conversation with your client, you've researched the issues, you've got the strategy, you know what to do, you're going to write the contract, you're going to write the trust, you're going to tell them, "I know you should do this." And then either you're going to think or they're going to ask, "Cool. Hey, what about the tax implications?" And then you're going to freeze and you're going to say, "Well, I can't speak to that at all. You should go talk to a tax lawyer or an accountant." And then they're
Eve Albert (27:56):
Going to
Jeremy Babener (27:57):
Say, "Okay, who should I talk to?" And you're going to say, "Well, I know of a person. Let me connect you with them." And then you are now going to need to talk with that person about everything going on, all the facts of the situation, all of your thinking about your decision making and your recommendation. Then they're going to need to talk to that tax person about their inclinations, their risk tolerance. You've just added at least $10,000 of fees just because you couldn't off the cuff say, "Oh no, that's not a problem. I'm not the tax specialist, but I can tell you without advising you on the specialty that I can think of no reason why that would be a problem." Or you could email your tax contact and say, "Hey, here are the facts. Here's why I don't think there's a problem. Do you think there's an issue?
(28:51):
If so, I'd be glad to write up. I've already given you the facts that I think are relevant for tax analysis,
Eve Albert (28:59):
And
Jeremy Babener (28:59):
Then I can make the introduction to the client." It's just incredibly efficient. The same is true. I mean, it's the same reason why. I know this is not the reason why you take legal ethics, but it makes sense to take legal ethics because again, whatever you're doing with a client, if you don't know the basics of conflicts of interest, it's always relevant. And same with contracts, right? You're always writing contracts. If you don't have the basics there, you've got a real problem. I'd say if you are a law student looking to do estate planning, if you're taking an estate planning course, my guess is they will incorporate estate tax and income tax into it. But I think what I would suggest is to email the professor
(29:43):
And just ask, "Hey, I'd like to work in estate planning. I don't see myself advising very much in cases in estates of more than five million. Do you think I need more?" And you might just take the class and during that The professor will identify you, what those more advanced considerations are. I do think estate planning is another course that everyone should take because no matter who you're advising, they're going to die. You don't need to tell them that, but they're not going to live forever. They need an estate plan unless. I mean, even if they're not super low income, but even if they are super low income, they might well have some issues.
Eve Albert (30:33):
And
Jeremy Babener (30:33):
Everybody should have a medical directive that just explicitly says, "Here are their preferences." Whatever they are, you want those written down so that if you are in that situation, you are in the hospital and you're not able to speak intelligently or consider, you want something written down about what you want, what your preferences are. If for no other reason, then do you really want your friends and family to have to be dealing with the fact that you're in the hospital and not able to speak at the same time that they're trying to figure out, well, what might my friend have actually wanted? What a horrible gift to leave to your friends and family. So I think everybody should be taking estate planning.
Charnese Ballard (31:16):
Yeah. Don't do it for yourself, do it for others.
Jeremy Babener (31:19):
Yes,
Charnese Ballard (31:19):
Absolutely. I love estate planning. I ride for estate planning every day of my life. It's so much fun. And it has this stereotype of being so depressing and sad because you're like, "Oh, if this person dies, people fighting over money." But it really is, in my experience, people come in and they want to tell me about their family and give me all the inner details and then talk about how proud they are of their kids or this or that. It's just like I love it so much for that reason, but that's besides the point.
Jeremy Babener (31:50):
Yeah. No, no, I think that makes sense. And really, it does not need to be a negative. Of course, sometimes it will be, but I mean this is planning.
Charnese Ballard (32:01):
Yeah. So taking a tax course, we recommend for everybody, unless you don't pay taxes and you're a sovereign citizen, take a tax course. What other traits, let's say you do really well in your tax course, what other traits are a must if you really want to go into tax law? What have you found about yourself or about some of your colleagues that are personality traits or work ethic or something along those lines that have proven really to make them a really successful tax professional?
Jeremy Babener (32:33):
It really depends on the type of tax lawyer you're interested in me. And you don't need to know that all the way in advance, but there's a reason why, and it's been years since I've said this or learned this, so don't hold me to it, but I believe that the ABA or some other educational organization did a number of surveys and found that taking basic federal income tax in law school is the most underrated course, meaning that everybody goes into it expecting to be bored and the difference between what their expectations are and the actual experience is the largest. And the reason is because tax is all about policy and everybody loves public policy. There is also data showing, and again, it's been a while, but I believe there's data showing that the tax lawyers are, as a percentage, they report the highest level of satisfaction of any area of law.
Eve Albert (33:38):
Really?
Jeremy Babener (33:38):
Now, why is that? It is probably because nobody defaults into being a tax lawyer. You choose to become a tax lawyer, so you've given it though. You don't just default into it. And so that would also make sense.
(33:56):
I think that it is definitely not for everyone. It really depends on the area. I think most anybody could have a very good and rewarding and enjoyable career in tax law in some area. So the litigators might just go into tax controversy work. You don't really need to be a super sophisticated tax person because you're just going to be researching the one issue, the two issues involved in that audit. But I think that tax law is like anything else. You have to find joy and excitement in the learning and the exploration of whatever is involved. So for me, I really love the planning aspect. And so I do a lot of work with the client, what are their goals? What really matters to them? And there's a lot of similarity amongst clients, but it is so important to have that conversation. And part of it, and this is not common amongst different clients, part of it is how much do they want to be super conservative and safe versus very aggressive?
(35:10):
There is a spectrum and no one is at the same spot. And so thinking about that, because the IRS takes positions on most everything, and you can imagine the positions they take are the opposite of the positions that we might want to take. And the fact that the IRS has taken that position does not mean that it is correct. The IRS loses in the tax court all the time.
(35:40):
So the fact that the IRS has said you can't do that does not mean that you can't do that. In fact, it is not uncommon
(35:49):
For a member of Congress to say what a ridiculous position that the IRS has taken. And so when you're talking with the client, we're going to have a conversation of what are the chances that the IRS is actually looking at this? If they look at it, what are the chances they care about it? If they care about it, what are the chances they think that they're going to win on it and that they are going to be willing to put in the resources to actually pay it? So you're talking through with a client and what are our arguments? Are they legitimate arguments even if the IRS might disagree with them? And
Charnese Ballard (36:22):
Then it's a
Jeremy Babener (36:22):
Client call.
Charnese Ballard (36:24):
Yeah, that's very interesting because I think that the general consensus is like the tax code is the tax code and you go by it. But what I'm getting is that there's a lot more wiggle room than you would think surface level.
Jeremy Babener (36:37):
It's the same as any litigation. They're interpreting a contract, they're interpreting a statute, and the two different sides disagree about what the meaning of is.
Charnese Ballard (36:48):
Yeah. Interesting. All right. Well, this has been a very wonderful conversation. We're running low on time. So I have one last silly question for you. Do you file your own taxes or do you pay someone to do it for you?
Jeremy Babener (37:04):
That's a good one. I used to file my own taxes. Now I pay an accountant. We have now several different businesses and there's more to it. I would say in general, the reason that I. I mean, with the creation of the TurboTax type options, that
Eve Albert (37:26):
Really
Jeremy Babener (37:26):
Takes care of it the vast majority of the time. Even in semi-sophisticated situations, I think maybe I just trust it a little bit less. And to be honest, when you are running successful businesses, the cost of paying and then having the opportunity to interact with an accountant about different strategies or so forth is good to have. It's always good to have good advisors.
Charnese Ballard (37:51):
Right. All right. Well, on that note, thank you so much for your time. I really enjoyed our conversation and I appreciate you really expanding on this topic. I feel like I learned so much, so it was really great talking to you.
Jeremy Babener (38:05):
Yeah, thank you.
Todd Berger (38:07):
We'll be right back. So Charnese, after listening to Eve's great interview, what did you think? What's your reaction to hearing about tax law and a possible career in tax law?
Eve Albert (38:25):
I think it's actually a little bit more interesting than what I initially thought it was. I though it was someone who was sat in the corner just looking at spreadsheets all day, almost like a lawyer accountant, but it sounds a little bit more interesting, especially when he began to talk about the IRS and what that looks like and the strategy of litigation for that, because that litigation may look a little bit differently than maybe what a traditional litigator would do. So yeah, I though that that was pretty interesting.
Todd Berger (39:01):
So Charnese, what did you know about tax law before the interview and what did you learn afterwards?
Eve Albert (39:09):
Oh, what did I know? I knew nothing about tax law, honestly. I honestly wasn't interested in it. The last thing I knew about tax law kind of sort of was watching a movie about. I'm not sure if you've ever seen the movie Bringing the House Down, and the guy was a tax lawyer. Okay, just watch it one day, but he was a tax lawyer.That's the only thing I knew about it, and he seemed like a really cool guy and had a nice life. That's all I knew. But now I know that they do structured settlements and that anytime that money is exchanged, there are taxes involved, which I think is really interesting. And I also didn't really look at the perspective of a certain type of strategy for what defending a client against the IRS would look like. So that would be really interesting to see.
Todd Berger (40:03):
What about you? What made you want to interview someone involved in the field of tax law?
Charnese Ballard (40:09):
Yeah, I think that it's interesting. Some of the topics we've broached on this podcast, I have gone into being like, "Okay, I really don't have any interest in this, but it seems like I should expand my horizons, do a little bit more research and get a good basis on certain things."
Todd Berger (40:28):
Did you know basis is a part of tax law? I don't know if that was a pun that you were
Charnese Ballard (40:32):
Talking about. I don't do my taxes. Wait, let me actually restate that. I definitely file taxes, but I don't do them.
Todd Berger (40:44):
That's fair.
Charnese Ballard (40:45):
But yeah, no, I was unfamiliar with tax law in general, and like I said, I think it gets a bad rep because people are like, "Wow, numbers are so boring." And it's not a horrible assessment, but it's like, "Give it a chance." I'm taking gratuitous transfers this semester, which is already a lot of math. It's multiplying fractions, which I don't know how to do, but it's like there's something a little fun about it. I think I could foresee that being a shared experience in law school. You haven't done math or algebra probably since the required course in undergrad. So if you just have a love for math, but you also have a love for the law or you just really like working with numbers or like Jeremy was talking about strategizing, it can be something to definitely consider. I think that it absolutely has its perks for the right student.
Todd Berger (41:43):
I though there were a couple of really cool pieces from your interview. So one thing was, and I've heard the story over and over again, and I guess to a certain extent, my own career kind of mirrored this. Some people go to law school, maybe they're like Charnese, and they're like, "This is what motivated me to go to law school. This is what I want to do." And then some other people, just random things happen in their lives and one thing leads to another. And his story was like he was going to try and take this other class and the class didn't enroll and it got canceled. And so he just ended up taking this tax class or whatever it was, and it just set his career off in a different direction. And I think sometimes we cancel classes because there's one or two students short or something like that, and you think he's just doing something totally different with his life if one more student enrolled or something like that.
(42:34):
But what I do think, apart from the randomness of what that means in terms of how people end up where they end up in their careers, it shows you that there's all of these kinds of areas of law out there and we don't think about them, we don't necessarily know about them. And then you get exposed to them and you're like, "Wow, this is really cool." And it ends up changing people's life. So that's why I always tell students, it's like, yes, you're in law school, take your bar classes, you want to pass the bar, those are important, but also try and cast a wide net. Take a lot of different things because it'll expose you to all different kinds of areas of law, like gratuitous transfers that I've never heard of. And you can do those classes and you'll learn and you'll be more knowledgeable lawyer.
(43:17):
And maybe you'll never practice in that space, but you'll know a lot more and you'll find it really interesting. And last thing I would say too is the structured settlement piece, super creative. So a lot of really cool creative things that lawyers are doing across the industry, and hopefully you think that that's what makes you a good lawyer and that can inspire you if you hear interviews like that. Whatever I'm going to do, I'm going to try and where I can, and it makes sense trying to look at problems thinking outside the box.
(43:47):
Many people don't think tax law is creative, but it is. It's really a creative intellectual process, and I thought that was really cool. And a lot of areas of law are like that you might not have thought about.
Charnese Ballard (43:57):
Yes, Todd, I absolutely agree with what you just said. And I had a similar thought while I was recording the episode and listening back. Jeremy said something that has really stuck with me and it kind of changed the way I have thought about registering for classes. And I think that the sooner in law school you hear this and kind of give it consideration, the better off. He said that for the sake of your client, it's good to give yourself a basis for him in tax law, because that way if they come to you and they say, "Oh, well, I don't know if this part of the settlement is going to be tax deductible or is going to be subject to taxes," excuse me. And in cases like that, you'd have to hire another attorney and then that's another retainer or fees that they have to pay.
(44:50):
So you're doing your client a disservice by not being as well-rounded on certain subjects that we know are going to keep coming up. And so Charnese, since you have just finished at the point of recording, you've just finished your 1L year, you, I'm assuming, are now registering for classes of your own accord rather than doctrinals that are mandatory, right? Is this something that you have considered already? We know that you're very career focused, you know what you want to do, but have you been considering the way that the information you're gathering now will serve your future clients at all?
Eve Albert (45:33):
Absolutely. I think that for family law particularly, there's going to be a part of that where it's estate planning. And so even estate planning is going to require taxes as the guest said. But I think ultimately as lawyers, we want to really help people and being well-rounded will help us in all of those aspects. Of course, we want to be careful in not giving legal advice and understanding that we can't give it legal advice if we don't have expertise in it, but being well-rounded to identify and say, okay, I need the help or I could settle this on my own. I think that's a really good thing to have if you've taken certain classes that are versatile in your area of law.
Charnese Ballard (46:19):
See, and that's my problem now because I really, no offense, Todd, I really don't want to have to take criminal procedure because I really don't think I'll ever be practicing criminal, but it's one of the foundational things. I think I probably should take it, but I don't know. What do you think? You're going to push for it no matter what.
Todd Berger (46:37):
Well, I think you should take it because if nothing else, it'll help you pass the bar. And ironically, tax is not on the bar, but criminal procedure is, and there's two different criminal procedures. We can talk about which one you should take. Some schools offer one big kind of four credit class, but I think that's really interesting. I love constitutional law. Tax, interestingly, is all statutory. I suppose there's, I shouldn't say all statutory. I suppose if there's someone listening to this who understands tax law really well, they're probably like, "This guy's an idiot. He's talking about tax law. He doesn't know what he's talking about." So maybe there's some constitutional issue in there, but it's largely a question of statutory interpretation. There's a tax code, and I think there's basically over a thousand different laws that are a part of the tax code created over decades and decades and decades.
(47:33):
And there's all these rules that come out from the IRS. So it is a different area of study for those people who are interested in how you dissect statutes and questions of statutory interpretation. It's interesting. It's very different than criminal procedure, which is almost entirely constitutional. So I don't know, I hope the tax people have nice things to say about criminal procedure because I have nice things to say about tax.
Charnese Ballard (47:58):
Let's all just have nice things to say about each other as a general rule.
Todd Berger (48:02):
And each other's area of law. Yes, absolutely. Yes.
Eve Albert (48:06):
Well, I'm interested to see how it applies even with. Because you guys, I'm interested in family law, but tax law with elder law and what that would look like with Medicaid and just all of the subsidies that they get and then how it applies to older people and even the people that are caring for them. So I wonder what that kind of stuff looks like. I feel like tax law can go into each, even contracts, all kinds of different things.
Charnese Ballard (48:38):
Yeah, it definitely touches everything.
Todd Berger (48:42):
It really does. And that's I think part of what makes it kind of interesting. You think that it's just you're filling out your taxes at the end of the year or whatever, getting your refund, but it really is. And I think if you're going to be practicing in different area, like you're going to do family law, you'll come across a lot of different issues that relate to that. Taxes are just one of them, so it's probably good to have a working knowledge of it. So again, just another, I don't know exactly if you'll get into that in your tax one class, but you can always sign up for a class and ask those questions that you have family law questions
Eve Albert (49:16):
Is
Todd Berger (49:16):
Always a good thing to talk about and a little bit more knowledgeable for practice, even if it's not in that area.
Eve Albert (49:24):
Yeah. I might even try a random class because you were just talking about trying random classes. I am remotely not even interested in environmental law. Sorry, Eve.
Charnese Ballard (49:36):
That's like my baby.
Eve Albert (49:39):
So I might take that. I might take that course. It's really interesting, honestly.
Todd Berger (49:45):
I can't answer that, but I would encourage everybody to take many different courses. And you'd think that I, on behalf of all the professors teaching all these courses, I work on commission, which I suppose you have to pay tax on, so I'll just leave it at that. Thanks to our guest, Jeremy Babener, for joining us for this episode. If you're looking for even more content curated just for you, head over to the ABA Law Student Division website and become a member. We want to make sure we're making the best content for you. Let us know what you'd like to learn more about by telling us in a review on Apple Podcasts or Spotify. Finally, we'd like to thank our production partners at Moraine Media and to thank the ABA Law Student Division for making this show a reality. We'll be back next month with our next episode.
(50:33):
See you then.