Melissa L. Wiley on Tax Controversy, Teaching, and Judgment

ALEXANDER POWELL: Welcome to Cited Authorities. I’m honored to have today’s guest with me, Melissa Wiley. Melissa is a partner at Kostelanetz and one of the most respected voices in tax controversy, and someone I’ve been looking forward to having on the show. Melissa, thank you for being here.

MELISSA WILEY: Thank you so much for the kind introduction.

ALEXANDER POWELL: Melissa, you started your career in actuarial science. How did you end up practicing tax law?

MELISSA WILEY: Great question. When I was growing up, there were a handful of things I always really loved when it came to school. One of them was math. I love solving problems. I love getting to the end of a problem, and that satisfaction of having worked through it and gotten to the answer. I really loved writing. I really loved expressing myself in words. And that was also true of music. I really loved music. And so while I feel like most of my classmates either were English and history buffs, or they were math and science buffs, I was kind of this weird mixture of math and writing and speaking and music. And so when I thought about what I wanted to do and what was most likely to make me a successful adult, I thought, well, there are a lot of people who are really good at music, and there are a lot of people who are really good at writing. But there are a lot of people who really don’t like math, and a lot of people who are really intimidated by it. And at the time, the actuarial field, the profession of being an actuary, was showing up at the top of all of these lists as, like, best job, you know, in terms of stability and pay and challenge. And I thought, well, I really like math, and so I ended up deciding that that is what I should pursue. I think it’s funny that we have kids, and I mean kids, when they’re 16, 17 years old, trying to decide what they want to do for their lives. But that is what I decided at that age. And so I sought out actuarial science programs. I ended up going to the now defunct, it’s part of St. John’s University now, College of Insurance, where I majored in actuarial science. I had a really great time there. I really enjoyed my classes; the same things that appealed to me about math appealed to me about my actuarial classes. And I got a lot of work experience too. I was part of my college’s co-op program, and so I got to experience what it would be like to work in the insurance industry. And what I realized pretty quickly was that while I really loved the work, the personality of the job wasn’t quite fitting in as much as I would like. And so I tried a little bit to move around the industry. I worked for a reinsurance brokerage firm for a while, where I had a little more of an ability to, I guess, persuade, and enjoyed that aspect of it, but then sort of ended up losing some of the technical rigor. And the more and more I thought about it, I was like, you know, I’m still young, and I still have the ability to pivot, and given that I have a very specific undergraduate degree, if I want to do something else, I should go back to school, and hopefully go back to school in something that will give me more options than working in the insurance industry.

So I settled on law school. I thought long and hard about law school, about a master’s in teaching, about studying psychology, and ended up going to law school. I attended Georgetown. I made some really lucky choices, because I had never been to the law school until the first day of orientation. I just kind of showed up, having never visited the campus. I had been to DC, and I knew the school was a great school. And then I was so lucky that I really enjoyed it. And what I found in law school, and I think what ultimately led me to tax law, was that you could still be technical. You could find an area of the law that still had that rigor of difficult problem solving, while at the same time having it be important that you can express yourself well and that you can advocate for clients. And I took a tax class with Marty Ginsburg, Justice Ginsburg’s late husband, who was a brilliant tax lawyer and just a really amazing being. Just funny, really dry sense of humor. Truly cared about his students, remembered his students, like the ones who actually cared about tax, and encouraged his students to continue to learn more. And so I took a part-time job my third year of law school in tax controversy and sort of never looked back.

ALEXANDER POWELL: It’s a common theme in the show, and it seems like with every other guest, the law is not their first career.

MELISSA WILEY: Yeah. And I think to some extent the law sort of encourages that, right? When you look at the breadth of things that people with a law degree do, even those who practice law, there are so many different ways that you can choose to be a lawyer. You can be a lawyer to large corporations and help them on massive deals. You can be a lawyer to children in custody disputes. You can be a criminal lawyer. You can be a family lawyer. You can be a lawyer who only does appellate work. You can be a lawyer who stands up in court. There are so many ways for people who just appreciate a challenge to be able to find their place in law. And so I think that might be part of the reason that so many people get to a point in their life where they feel like they want to solve some sort of problem in the law. The law might be the place that they can do it.

ALEXANDER POWELL: Yes. And Melissa, what does your practice focus on day to day?

MELISSA WILEY: Sure. So my practice over 20-something years now has been pretty much exclusively in tax controversy, and my cocktail party response when people want to know what I do is, I fight the man. The more detailed version of that is that I represent taxpayers in all sorts of interactions with both the IRS as well as state and local taxing authorities. So it may be somebody is under audit. I represent clients at administrative appeals within the IRS. I represent them in litigation with the government. I also represent clients who are looking to come into compliance with their tax obligations, who maybe have not been as much in compliance as they would’ve liked. So really, anytime somebody is doing something, I like to say, sort of reactive to the tax system, those are my clients. And I say that to contrast it with the folks who do planning or deal work in the area of tax, people I have enormous respect for and could never do their job. I’ve always been really lucky to work at places where I’ve had those people, with those brains and that expertise, available, because I think it makes me better at representing my clients to have those kinds of voices and that expertise available.

ALEXANDER POWELL: Melissa, you also teach at Georgetown, your alma mater, where I’m studying.

MELISSA WILEY: I do. Yeah, it was really very surreal the first time that I got my letter from Georgetown extending the offer to serve as an adjunct professor. I guess it should go without saying, I loved my time in law school. I really enjoyed Georgetown. Our office is right across the street from the law school, and so I’ll often joke now that I really didn’t get very far in 23 years. But I love teaching. I love the questions students come up with. I taught, and will be teaching again this fall, a class in tax research and writing, and it cannot be overstated how much, when you have to teach something, even if it’s something you already know, you learn so much. A big part of what we talk about in the class is legislative history, and how you use different pieces of legislative history to be an advocate for your clients or to understand the tax law. And, you know, I tell my students it was probably a decade into my career before I really understood the context of all those little pieces. And I describe it to them as, you have to know what the path is, and what evidence is generated at each point in the path, and what crumbs it leaves, to put things into context. And in the process of coming up with the class and what I was going to teach my students, I realized that I was organizing that in my head in a way that now made it so much more useful to me.

So I have loved teaching, just for the experience of working with students and helping them understand things. And a part of our class, too, is writing, so it’s giving them feedback on their writing, giving them advice on how to be more persuasive without overdoing it. And, you know, part of what I love about the law, too, and particularly what I do, is the importance of those softer skills of judgment, of writing, of how you present your arguments. And it’s just been a wonderful opportunity to revisit those.

ALEXANDER POWELL: I think that is common for newer attorneys and law students who are newer to advocacy generally. There’s a tendency to overdo it, like you said, and not lean into, okay, what are the facts, what’s the law, and then really hammer that home with clean, quality, plain-English writing. There’s a tendency for new attorneys and law students to be more ornate, to try to get too fancy, which can backfire.

MELISSA WILEY: Yeah. Absolutely. And it’s funny. Just earlier today I had a meeting. We have these mentoring teams within our firm, with folks at all levels of the organization, that come together once every quarter or so for a mentoring meeting, and one of our paralegals asked something to the effect of, how do you learn trial skills in law school? She’s planning on going to law school about a year from now. And all the lawyers just kind of laughed, and we were like, I guess in theory you learn some of it, but there’s a part of it that you just can’t learn until you show up. And I have always said this to young lawyers and those who want to be in the law: you really just have to sit and watch. I cannot commend enough just going into a courtroom and sitting and watching. And what you realize is every lawyer has their own approach. Every lawyer has their own personality. And you start to see what lands well with witnesses, with juries, with judges, with different judges, right? We know they all have their own preferences. I find that to be kind of the anthropological interest of the law. I love learning about the preferences of different audiences and adjusting your technique to whoever you’re talking to. And so you’re right. I think there are people who think, oh, I have to go out tough. One partner I worked with early in my career was editing one of my briefs, and he was a former judge, so the weight of his words was significant. He said you never in your briefs want to say that something is clear, or clearly this is the answer, because if it was clear, you wouldn’t be in front of me in my courtroom. I will never forget that. More than 15 years later, I still remember that in my writing.

ALEXANDER POWELL: That is important advice. As far as client counseling, that is very difficult to teach, also aligning with judgment. There are a lot of difficult conversations that you must have, where you’re not able to offer the news that you would prefer to offer, despite best efforts, and then offering the options to the client in terms of, okay, here’s option A, here’s option B. What should newer attorneys and law students know about client counseling?

MELISSA WILEY: This is another great one that I learned from one of my very first jobs. It was actually my law clerk job from my third year of law school. The attorney I worked for told me this story about a client he had, who had worked all this time for… in an audit, thought he was treated very unfairly in the audit. Objectively was treated very unfairly in the audit. Went to appeals, got a great appeal settlement. Went to the client and said, look, I’ve got this excellent result, we’ve won essentially. And the guy said, I don’t care about the money. I want an apology. I was treated really unfairly. And he said, I will never forget that client, because he taught me to always understand, and always ask, what it is your client’s goals are. And oftentimes you get a client who comes to you and, the first conversation, right, they’re telling you all about the facts. That’s what they want you to know. The facts, the facts, the facts.

And I try to always remember that my version of what a successful resolution of those facts is may not be my client’s. And so the question that I always need to ask before the end of that very first call is, what do you want out of this? And that can be everything from, I just want the government off my back. I never want to see another letter from the government in my mailbox again. It could be, I want this other person to pay something. It could be, I just want to fix this so that I can sleep well at night. And I’ve had clients say, look, if I have an individual client, look, my wife is so nervous about this. Like, what do I do? And it’s really listening. We bring the technical skills, but what we need to listen to our clients about is what results, what services can we provide that will get them to that goal? And so if I have a client who says, my wife is so angry at me right now, I will always offer, do you want me to talk to her? I’m happy to talk to your wife and explain what is going on. I’m happy to answer whatever questions about the process you need.

Oftentimes your clients will want things that you can’t get them, right? That client that wanted an apology from the IRS, we all know that was not coming. And so you want to make sure that your clients have reasonable expectations, too, so that if you get them what you think is the perfect solution, they don’t come back and say, well, I’m not happy. That’s not actually what I wanted. I wanted something different. Explaining to them what the limitations of what we can do for them are, I think, is also super, super helpful.

I can’t tell you the number of people, especially in the voluntary disclosure space that I work in, who will call and say, I cannot sleep at night. This is keeping me up at night. I need to fix this. And one of the first things I tell them is about how the IRS has programs to fix these things, because there are so many other people in your situation. You’re not crazy. You’re not an outlier. There are other people who find themselves in the same situation. And the reason the IRS has those programs is they want you to be able to fix it. And really listening to what is going on beneath the client’s ask of you as a tax lawyer, and trying to get them in a better head space, trying to give them that counseling, right? Not the legal advice, but that counseling that they really need.

And I think it’s really easy to forget about that part. In some practices it’s more important than others. But for me, that’s such an important part of how I represent clients, because I think it’s important, but also because it’s the part that’s most meaningful to me. I will always feel better about letting a client feel like a weight is off their shoulders than I will about getting the client, you know, a concession in terms of cash. That quality of life difference. I’m really proud of the cases where I can give a client that.

ALEXANDER POWELL: You have the right demeanor where, if I were the client and my wife were upset about what was going on and you offered to speak to her, I’d be like, yes, of course, that would be great. I could think of other attorneys where they’re more cold, or more terse, or like, no, thanks, I’m good. I’m good on that.