Tax Law LL.M.s get ready for Digitization

Law schools are launching new LL.M.s, in part to help lawyers keep up with the digitization of taxation

Tax law has always been a hot potato — and the field has become the subject of even more intrigue as governments consider how to finance their unprecedented coronavirus stimulus packages. The burden could fall on companies, but this is highly controversial. In either case, tax lawyers will be in greater demand and a number of law schools are launching new LL.M.s, in part to help lawyers keep up with the digitization of taxation.

In November, Temple Law in Philadelphia launched a new Master of Science in Taxation (MST) program, in partnership with Temple University’s Fox School of Business. That course launch followed hot on the heels of an announcement from Austria’s WU Executive Academy, which created a new LL.M. in Digitalization and Tax Law.

The latter program aims to equip students with the skills required to catalyze technological innovation in tax practices. Robert Risse, faculty member of the WU Executive Academy, says that information technology (IT) impacts tax practices in myriad ways. For example, artificial intelligence (AI) can simplify and automate routine tasks, more efficiently execute and monitor tax processes, and offer deeper analytical insights that inform strategy.

“The bottom line is that automation is freeing up time to work on other higher value tasks,” says the corporate vice president of tax and trade at Henkel, the German chemicals company.

Tax lawyers will have to become increasingly aware of the opportunities that fresh technology provides, he says. The WU course prepares students to succeed in this intersection of tax and technology. “In the curriculum, we consider all elements needed: tax and customs law, business process modeling, the understanding of how data is managed, processed and prepared,” says Risse.

The technical, evolving nature of tax law

Jonathan Schwarz, director of the International Tax Law LL.M. at the Dickson Poon School of Law at King’s College London, says that measures, such as the UK’s Making Tax Digital scheme and the Russian system of real-time automatic submission of transactional data from point-of-sale to the tax authorities, are changing the way tax is administered.

Other uses of data mining and surveillance technology allow fast amounts of information to be processed automatically by tax authorities, he says. “Tax is a technical and fast evolving legal subject: it demands good verbal and analytical skills.” International tax law is particularly demanding, adds Schwarz. “It combines not only a knowledge of national tax law but also international, corporate, commercial and administrative law.”

King’s launched an Online International Tax Law LL.M. three years ago, to reflect changes in use of technology. “We have a large class drawn from around the world, studying key subjects such as international tax law, transfer pricing, EU tax law and VAT,” says Schwarz.

Tax laws are constantly in flux

Patricia Brown, director of the Graduate Program in Taxation at Miami School of Law, says that advances in technology are challenging existing international tax rules, as countries find that some companies can conduct substantial business with customers without having a physical presence. “If those companies are in tax havens, they may have a competitive advantage over domestic companies that are subject to tax at the corporate level.”

Her course provides students with a strong grounding in the basics that every tax lawyer should have. Students can then decide to focus on general business taxation or international taxation (either representing corporations or high net worth individuals). 

Classes are constantly updated to reflect the rapidly evolving tax landscape, says Brown. “Tax lawyers need to remain flexible, as it is likely that the rules are going to be in flux for some time. They may also want to sharpen their quantitative skills.”

However, even as attorney-client communication methods, research tools, and the marketplace of tax-sensitive legal documents changes, the core training for how to think and reason through complex tax issues, research tax law, and draft documents remains essential, says Johnny Buckles, a faculty member of the University of Houston Law Center. “All of these skills rest on a foundation of technical knowledge, communication skills, critical and creative thinking.”

His Tax Law LL.M. has an externship program with the IRS to provide practical skills training for students within the government, but the skills are applicable elsewhere too. “Tax courses and training are essential areas of expertise for a well-rounded lawyer who wants to provide excellent advice on structuring transactions,” says Buckles.

“Tax laws significantly impact business structures and business planning, so our students are encouraged to be well-grounded in tax law, whether they choose to specialize in that practice area or not.”

Christophe Roquilly, professor of law at EDHEC Business School in France, says that the lawyer of tomorrow must obviously have a solid base of legal skills, but also soft skills, business skills and digital skills. “By developing these, the lawyer moves from a legal intelligence to a multiple intelligence, which allows the development of the collective intelligence of legal teams,” he says.

He adds that the demand for technology trained students is growing but is not yet what most of the law firms are asking for. “Some departments of do not seem to be fully aware nor ready, but that is changing,” he says. “The challenge is to get the students ready for the future and at the same time be fully operational for daily activities today.”

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