What Makes a Top-Notch Tax Advisor?
Key questions to ask to "pimp 'em" and find the "one"
Let’s talk about something a little controversial: what actually makes a tax advisor top-tier?
As both a physician and a tax professional, I’ve noticed a fundamental difference in how competency is judged in medicine versus tax.
In clinical medicine, a decision is typically considered valid if it aligned with the standard of care - what most similarly trained physicians would do under similar circumstances. As long as your decision is consistent with that standard, you are generally protected, even in litigation.
But in tax? That logic doesn’t fly.
In the world of tax, you can’t justify a position just because “everyone else in town is doing it.” The IRS doesn’t care how many professionals or firms would take the same approach - they care whether you position is legally supportable based on what’s known as Primary Authority.
What Is Primary Authority?
Primary authority refers to the official sources of tax law—the ones that actually carry legal weight. These are the gold standard when it comes to defending any tax position. Here are the key players:
Internal Revenue Code (IRC): The supreme tax law of the United States, written by Congress. It’s the king—no other source carries more authority.
Treasury Regulations: Official interpretations of the IRC issued by the U.S. Department of the Treasury. These explain how the IRS applies the Code in practice.
Revenue Rulings: Think of these as IRS case studies. They show how the IRS interprets specific sections of the Code under particular fasts.
Revenue Procedures: These explain how the IRS expects taxpayers to comply with certain procedures and how the IRS operates internally.
Court Decisions: When disputes go to court (e.g., Tax Court, District Court), judges apply the IRC to real-world situations. These rulings can clarify gray areas—or even override prior rulings.
These sources are analogous to double-blinded, peer-reviewed research medical studies published in top medical journals—the kind used to create treatment guidelines. Just as those guidelines evolve with new research, tax law changes with new legislation, rulings and court decisions.
Why Primary Authority Matters
When researching a tax position, a top-tier advisor will ask:
“What primary authority support (or contradict) this strategy?”
The more credible authority you can cite, the stronger the position - and the more likely the IRS (or a court) will agree.
A Quick Example: Dr. Nip-Tuck’s Kitchen Renovation
Dr. Nip-Tuck’s accountant tells him he can deduct 100% of his kitchen remodel at home because he “works from home sometimes” and “needs to eat during virtual consults.”
Something didn’t sit right. So Dr. Nip-Tuck got a second opinion.
The new advisor found and share two key pieces of primary authority:
IRC §162: Allows deductions for expenses that are ordinary (common in your business) and necessary (helpful and appropriate for your business).
IRC §262: Explicitly disallows deductions for personal, living, or family expenses.
Based on this, the advisor concluded the kitchen remodel did not qualify for a 100% deduction. It was personal in nature - not ordinary or necessary for the practice of medicine, even with telehealth.
Tax Isn’t Black and White
Most tax positions aren’t clear-cut. These are often conflicting authorities or factual nuances. That’s why top-notch tax advisors don’t just “look things up” - they evaluate the strength of each side, assess your specific circumstances, and craft a strategy that’s both effective and defensible.
You know what’s wild?
In tax, there are no equivalent of UpToDate.
Even IRC publications (like Pub 463, Travel Gift and Car Expenses) are not legally binding. That means, your advisor cannot rely on them to defend a position.
Crazy, right?
How to Vet a Tax Advisor (Especially If You’re Taking a Controversial Position)
If you’re considering a tax position that’s aggressive or lives in a gray area, choosing the right advisor is everything.
Here’s the key question to ask:
“How do you make decisions when a tax position is controversial or unclear?”
A top-tier tax advisor should be able to:
Reference primary authority - not just say, “everyone does it.”
Walk you through how they research, analyze risk, and document a position.
Here are some great follow-up questions:
“Can you show me where that’s supported in the tax code?”
Has this strategy held up in court?
What are the pros, cons, and risks associated with this position? (Just like you’d explain risks vs. benefits when discussing a chemotherapy option with a patient.)
How do you do your research?
If they can answer clearly and confidently, you’ve likely found someone in the top 5-10% of the field.
A Final Gut Check:
When was the last time your tax advisor showed you a section of the code—or a court case—to support a deduction or credit?
Something to think about.
Final Thought
The best tax advisors aren’t just number crunchers—they’re legal interpreters. They understand risk, navigate gray areas, and defend your position using primary authority.
If you are taking a aggressive position, that kind of guidance isn’t just helpful—it’s essential.
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