Tax Attorneys Versus Accountants
Most people encounter tax questions through their accountant, and for compliance work that is appropriate. Tax attorneys serve a different function. They provide attorney-client privileged advice, represent taxpayers in disputes with the Internal Revenue Service and the Nebraska Department of Revenue, structure transactions to achieve specific tax outcomes, and handle matters where litigation is possible.
Privilege is the practical distinction that matters most in contested situations. Communications with an accountant are generally discoverable, while communications with an attorney are protected. When a taxpayer faces potential penalties, an audit that could expand, or possible criminal exposure, that difference is significant. Attorneys frequently engage accountants under a Kovel arrangement so that accounting analysis falls within the privilege.
Lincoln's tax legal capability sits within its established business law firms and a smaller number of specialized practitioners. Firms including Cline Williams Wright Johnson and Oldfather, Koley Jessen, Baird Holm, Fraser Stryker, and Rembolt Ludtke maintain tax practices serving Nebraska businesses, families, and agricultural operations, with varying emphasis on controversy, transactional structuring, and estate planning.
Tax Controversy and Dispute Resolution
Audit representation is core tax attorney work. When the IRS examines a return, the taxpayer's responses shape whether the examination narrows or expands. Experienced counsel controls information flow, ensures requests are answered accurately without volunteering unrelated material, and identifies where the examining agent's position is legally weak.
If an audit produces an unfavorable determination, several paths follow. Administrative appeals within the IRS resolve many disputes without litigation and are frequently the most cost-effective option. Unresolved matters may proceed to the United States Tax Court, federal district court, or the Court of Federal Claims, each with different procedural advantages. Nebraska state tax disputes follow their own administrative protest and appeal process through the Department of Revenue and state courts.
Collection matters constitute a substantial share of practice. Taxpayers facing liens, levies, or wage garnishment have options including installment agreements, offers in compromise, currently not collectible status, and penalty abatement for reasonable cause. Innocent spouse relief protects taxpayers from liability arising from a spouse's conduct. Trust fund recovery penalties, which hold individuals personally liable for unpaid employment taxes, represent a serious exposure for business owners and require immediate attention.
Voluntary disclosure programs allow taxpayers with unreported income or foreign accounts to come forward with reduced penalty exposure and generally without criminal referral. These programs have strict requirements and timing considerations, and attempting them without counsel is inadvisable.
Business Transaction Structuring
Tax consequences frequently determine whether a business transaction makes economic sense. Entity selection at formation, conversions between entity types, allocation of purchase price in an acquisition, treatment of goodwill, installment sale reporting, like-kind exchanges of real property, and tax-free reorganization structures all require legal analysis alongside accounting.
For Nebraska business sales, the difference between an asset sale and a stock sale can shift hundreds of thousands of dollars in after-tax proceeds. Buyers generally prefer asset purchases for the stepped-up basis, while sellers often prefer stock sales for capital gain treatment. Resolving this tension productively requires counsel who can model alternatives and negotiate allocations.
Employee stock ownership plans have become a meaningful Nebraska exit strategy, offering selling shareholders substantial tax deferral opportunities while transferring ownership to employees. These transactions require specialized legal expertise spanning tax, ERISA, and corporate law.
State and local tax presents growing complexity. Nebraska sales and use tax applies to specific categories of goods and services, and businesses selling across state lines face economic nexus obligations following changes in remote seller rules. Multistate income tax apportionment, property tax valuation challenges, and incentive negotiations under Nebraska's business development programs all fall within this practice area.
Estate, Gift, and Agricultural Tax Planning
Nebraska's agricultural economy makes farm and ranch succession one of the most consequential tax planning areas in the state. Land that has appreciated substantially over decades creates estate tax exposure for larger operations and, more commonly, presents the challenge of transferring an illiquid asset among heirs with differing involvement in the operation.
Planning tools include family limited partnerships and limited liability companies with valuation discounts, grantor retained annuity trusts, intentionally defective grantor trusts, charitable remainder trusts, conservation easements, and the special use valuation provisions available for qualifying farm property. Nebraska also imposes an inheritance tax with rates varying by the beneficiary's relationship to the decedent, which requires planning distinct from federal estate tax considerations.
Because federal estate tax exemption levels are subject to legislative change, effective planning builds flexibility rather than optimizing for current law. Attorneys experienced in Nebraska agricultural succession design structures that accommodate changing rules and changing family circumstances.
Choosing a Tax Attorney
Verify genuine tax specialization. Many attorneys handle tax questions incidentally within a broader practice. Look for an advanced tax degree, prior experience at a taxing authority or a national accounting firm, or a practice concentrated substantially in tax matters.
Match the attorney to your issue. Controversy representation, transactional structuring, and estate planning are related but distinct skills, and the practitioner who excels at audit defense may not be the right person to structure a business sale. Ask directly about recent comparable matters.
Discuss coordination with your existing accountant. The most productive arrangements involve attorney and accountant working together rather than duplicating analysis. An attorney unwilling to collaborate with your CPA will likely increase both cost and confusion.
Finally, engage early. The recurring theme in tax practice is that problems are far cheaper to prevent than to remedy. Structuring a transaction correctly before closing, responding properly to an initial audit notice, or addressing unreported income voluntarily all cost a fraction of what remediation costs after positions have hardened. For Lincoln businesses and families facing significant tax questions, early legal involvement is consistently the better investment.