Tax Lawyers as Tax Insurance

75 Pages Posted: 14 May 2019 Last revised: 23 Oct 2019

Date Written: April 16, 2019


Transactional tax lawyers, by rendering tax opinions, provide a version of insurance to clients. This insurance is clearly incomplete, but by providing a tax opinion, a lawyer conditionally agrees to indemnify the client for at least part of the potential loss the client incurs if the favorable tax treatment described in the opinion is successfully challenged. Although insurance is not the primary function of transactional tax lawyers, and although this Article does not argue that tax opinions should be regulated as insurance, indemnification — a key element of insurance — is an important part of the economic relationship between a client and a lawyer who provides a tax opinion. Surprisingly, this insurance-like function has been largely overlooked in the literature. Thus, by identifying and exploring the insurance-like aspect of the transactional tax lawyer’s role, this Article fills a gap in the literature and offers a new framework for understanding the value of tax lawyers. Additionally, this Article argues that the insurance-like aspect of tax opinions has important implications for the profession, potentially affecting tax advisers’ billing practices, the terms of client engagements, the design of tax opinions, the market for tax advice, and more.

Keywords: tax, tax opinions, tax insurance, malpractice, transactional lawyers, transactional tax, tax indemnity, tax practice, legal profession

JEL Classification: K34, K39

Suggested Citation

Field, Heather M., Tax Lawyers as Tax Insurance (April 16, 2019). 60 William & Mary Law Review 2111 (2019), UC Hastings Research Paper No. 357, Available at SSRN:

Heather M. Field (Contact Author)

UC Law, San Francisco ( email )

200 McAllister Street
San Francisco, CA 94102
United States

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