Editorial
Front Page - Friday, February 18, 2011
Baxley relieves tax law anxiety, CPAs help with stress
Erica Tuggle
Hal Baxley, attorney at Baxley Tax Law, P.C., says that tax law is not that much different from any other area of law. A lot of people, including lawyers are scared off by anything to do with tax, but after getting over the initial hump of the fairly stiff learning curve, he says it’s no more complex than any other area of law.
- Photo provided
With deadlines looming and the fear that errors can mean more than a few dollars in jeopardy, tax time makes everyone a little nervous.
For tax law attorney Hal Baxley, it’s a busy time of year, but not because of the tax returns, but rather the issues that arise from tax law. Baxley says that when most people think of taxes and tax professionals, they think of certified public accountants (CPA) preparing tax returns and crunching the numbers. The difference between them and what he does is that CPAs do the numbers and he does the words.
He relies on accountants to do the preparation of returns or any other accounting work like compiling financial data from the client’s books and records and classifying it. From there, the tax law case is not fundamentally different from other areas of law as he argues different points of law, tries to persuade a court or a revenue agent that his argument is better than the counter argument, and states the reasons why his client should win, he says.
While there is no typical case or type of client he sees, he says the classic case example of tax law would be a fairly high income individual who has been audited and the government has proposed “a big whopper of a tax deficiency” against them.
“Even for someone who is fairly sophisticated, that is a pretty scary thing,” he says. “It may be several times their annual income, and if they make $100,000 or $200,000 a year, it can really be a lot of money.”
The initial part of his work is reassuring his client that the problem is manageable and it can and will be managed and brought to a reasonably successful conclusion, Baxley says. It will help a client’s peace of mind to know that there is a strong tradition of settling tax cases and the government is very settlement oriented in tax cases.
Most of Baxley’s clients are referred to him by the CPA or a lawyer who is working with the client, and together Baxley and the other attorney or CPA approach the case in a team effort, he says.
“A lot of times the tax law and tax process seems like an unfathomable thing, so you just need to straighten it out for them and point out here are the issues that are effecting you and after you boil it down to what is key here, it becomes very understandable for most people,” Baxley says.
He says he tries to talk to his clients about what their expectations are in terms of a desired and reasonable outcome from their perspective and then he tells them from his perspective what would be a good outcome. One of the most important things, Baxley thinks, in deciding whether to accept a case or not is whether the client has reasonable expectations, and a lot of times that involves some education on his part.
“Most people, once they are able to get a grip on it, they are able to see that this is something [they] can live with and something we can manage. That part has a lot to do with the client’s peace of mind or quality of life, because if you owe the IRS a couple of times your annual income, then you don’t sleep well,” he says.
Clients often find they aren’t going to owe anything close to the deficiency or that they may not owe anything at all, he says. In one recent case, his client went in with a pretty large deficiency and came out with a refund. Although this doesn’t happen in every case, it does sometimes occur, Baxley says.
“One thing I think people need to be aware of is that the government is quite aggressive in calculating the bill, and so a lot of times they overstep,” he says. “Sometimes they shoot first and ask questions later. As long as we manage to dodge the bullet, then we can come back and bring things more into a manageable perspective.”
He thinks one of the most interesting and enjoyable things in tax law is that what lawyers call the facts are really conclusions from other areas of law, and these often tie in because the tax law is built on arrangements between people as often as it is built on factual circumstances, Baxley says.
“A lot of people are scared off by tax law, and I get that comment even from other lawyers,” he says. “Basically, tax has a fairly stiff learning curve, but once you get over that initial hump, I really wouldn’t say it’s any more complex than any other areas of law. That’s kind of a big misperception, but generates quite a bit of business for me.”
Descending from a long line of lawyers, Baxley says he wanted to be an attorney at 5-years-old, before he had any idea what lawyers even did. He attended law school at the University of South Carolina and took an interest in tax law early on because he realized that tax law is where the government is most invasive of its citizens’ rights on the broadest scale, and that tax law affects everyone who works.
“I thought that was a cause that needed to be championed, and I am a champion of lost causes. Hopefully, this is not one of them,” he laughs.
Now with 30 years of tax law under his belt, he says he wants his colleagues to know that he’s always available to them if they have a question on tax law. Many times there are small things that come up and can be handled with a phone call, and he says he’s glad to provide the help there.
Between the experienced help of a CPA and the safety net that Baxley provides, if the government shows up with a hefty bill, there’s no excuse for tax anxiety.
Contact Hal Baxley at 423-664-9770.
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