Law Schools

Is Getting A Tax LL.M. A Good Idea?

A Tax LL.M. can be a good investment depending on what you are expecting out of the degree.

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Many law students and even some experienced lawyers probably at one point considered getting an LL.M., a post-J.D. degree known as the Master of Laws. However, an informal acronym for the LL.M. is “Lawyers Losing Money.” This is primarily because the vast majority of LL.M.s do not provide better career outcomes to those who did not do well in law school while piling on an additional year of law school debt. Also, most LL.M. courses can be taken as a J.D. law student and experienced practitioners can learn the material in cheaper CLE presentations or from treatises and practice guides. Some LL.M. programs are so dubious that they are the butt end of jokes.

The one exception is the Tax LL.M. This is probably because the degree is very compatible since tax laws interact with just about every other law at some level. Also, tax laws constantly change, sometimes for the better, usually for the worse, so people think that there will always be work for tax lawyers. Finally, some firms highly recommend or even require a Tax LL.M. for their tax positions.

But not all Tax LL.M.s are created equal even though every program teaches the same tax code, IRS procedures, and similar tax planning techniques. Which means that where and the circumstances in which you got the Tax LL.M. can mean the difference between getting a respectable job and being stuck with one more year of unemployment with an additional $100,000 debt load.

So here, I will discuss what to consider before pursuing a Tax LL.M. degree. To make an informed decision, you need to figure out if tax is what you want to do and whether you will be a competitive job applicant upon graduation.

Do you even like tax? Over the years, I found that people either really love tax law or really hate it. The people who love it appreciate the complexity because it provides opportunities for creative solutions. The people who hate it can’t stand the number crunching. So the first thing to do is to get some exposure to find out whether you will actually enjoy practicing tax law. So take a few tax courses first or work for a tax attorney or a CPA before enrolling.

Most Tax LL.M. programs require applicants to have completed at least one tax course at the J.D. level.

You should know who you want to work for and what you want to do. Because tax law is very comprehensive, most tax attorneys specialize in one (or a few) niches of tax law. These include business planning, estate planning, M&A, tax litigation, tax controversy dispute resolution, tax exempt work, cross-border transactional work, executive compensation, and cryptocurrency, to name a few.

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Most Tax LL.M. graduates have a variety of job options although they are limited to tax. They can choose to work for the Internal Revenue Service Office of Chief Counsel, the Department of Justice Tax Division, or the legal department of their state’s tax agency. In the private sector, they can work for the tax department of one of the Big Four or regional accounting firms, go in-house, or work for a midsize or small tax law firm. The top students obtain one- to two-year clerkships at the U.S. Tax Court or work for the tax division of a large law firm or a respected boutique tax law firm.

I recommend researching each of the above government agencies and the local tax firms in the community to see which would be the right fit for you and whether you meet their qualifications.

Your Tax LL.M. degree does not replace your J.D. This was something I learned the hard and expensive way. Ten years ago, I got my Tax LL.M. degree with honors and high distinction. I was a finalist at the ABA Law Student Tax Challenge. And my student paper on virtual currencies was published at the Virginia Tax Review, one of the top academic tax journals in the country. It was cited in an IRS report on digital currencies and later in other publications.

But apparently, that was not enough to get me a job at the IRS, the Big Four, or a Tax Court clerkship after graduation. What I later learned from various sources was that my law degree from Whittier may have played a role since most of the firms I was interested in generally did not hire Whittier graduates.

I don’t blame anyone for my outcome since other factors like the economy at the time played a role as well. But it was a bummer.

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The point is to be on notice that your J.D. grades might still come into play, particularly for competitive positions at tax firms. If you think this will be an issue, you may want to contact the firms directly about their hiring criteria before investing in a Tax LL.M.

A Tax LL.M. can be a good investment depending on what you are expecting out of the degree. If you want it for the educational value, you may be able to get the same education at a cheaper price. But if you want the LL.M. solely to fluff up your résumé, you’ll need to find out whether you enjoy tax work, and what potential employers are expecting before enrolling in the fourth year of law school. In a future article, I’ll discuss how to choose a Tax LL.M. program.

Steven Chung is a tax attorney in Los Angeles, California. He helps people with basic tax planning and resolve tax disputes. He is also sympathetic to people with large student loans. He can be reached via email at sachimalbe@excite.com. Or you can connect with him on Twitter (@stevenchung) and connect with him on LinkedIn.

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