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Talking Tax with Tony Kim

On Behalf of | Feb 17, 2023 | Estate Tax

Anthony Kim specializes in assisting clients with Federal and state tax matters. He has worked over 26 years as an attorney with the Office of Chief Counsel, Internal Revenue Service, as a legal adviser and has litigated some of the most complex tax issues for the U.S. Treasury Department.


Q: Please tell me about your background and your many areas of expertise?

A: After law school, I went straight to government service for the Office of Chief Counsel, Internal Revenue Service. There, I learned the discipline of tax from the wonderful people who were senior to me in the government. I learned what tax rates meant and about various types of tax such as income tax, estate tax, employment tax, sales tax, etc. I learned everything that constitutes the fabric of a tax practice.

I stayed with the IRS for about 15 years, then was invited to practice at Ernst & Young in San Francisco. They asked me to lead the Tax Controversy practice, which I did, in 2007 and 2008. I left and returned to the IRS due to the national economic downturn.

I preferred working for the government because, contrary to popular belief, the IRS does not have a revenue target. The only charge I had was to correctly interpret and apply the law. It’s a very simple mission statement. I did that for another 12 years and then four months ago I left government service to open my own firm:

For about 20 years, I was an adjunct professor at two schools, Saint Mary’s College in Moraga, and Golden Gate University in San Francisco.

Q: What is the biggest public misconception about tax controversy and the Internal Revenue Service?

A: In my opinion, the biggest misconception comes from the word “controversy”. The IRS, and specifically tax controversy, is not controversial. It’s not a brawl if you understand what the government is doing: the government is trying to gather information to better understand what the taxpayer and the tax preparer intimately know. Remember that all the IRS has is numbers on a form, but the taxpayer and tax preparer have a grasp of the history and background associated with those numbers. An auditor is simply seeking an explanation. So, the better job a taxpayer does to educate the government, the less likely it is that things will go awry.

Q: What is one key thing that everyone should understand about estate tax?

A: When I think of estate tax, I think of two words: Planning and love. And here’s why I say that: Estates do better when you plan ahead. You save the beneficiaries costs, grief, and infighting – all the things that can arise around the disbursement of assets. You love these people enough to think about your mortality and plan for them.

Q: What are your thoughts about the potential changes to the estate tax exemption amount?

A: As you know, the House recently flipped to the Republican side and the Senate remained on the Democratic side, while the President is on the Democratic side. So, based on the shift of the congressional body and the Executive function, I don’t know who is going to have the power base to move anything. What I do know is that the exemption amount for 2022 is $12,060,000. It goes up dramatically in 2023 to $12, 920,000, a huge jump by nearly a million dollars. It will keep going up until 2025 and then in 2026 we go way back down. Now, whether the reduction in 2026 will take place, we don’t know, it is up to Congress. I can’t prognosticate because no one knows what Congress is doing right now.

Q: What are a few key benefits of a Limited Liability Company (LLC) as it relates to tax?

A: One primary benefit is the limited liability. You don’t have the two-tier system like a C-Corp so you still have the flow-through and you’ve got flexible membership so anybody can be a member, unlike an S-Corp which has restrictions on membership.

The limited liability nature of an LLC, while still maintaining a flow-through entity, makes accounting very easy and protects personal assets.

The flip side is that the formation of an LLC is a bit more cumbersome than a Sole Proprietorship. It is more costly due to annual filing fees, etc. There are pros and cons, but an LLC can be a great vehicle and is easy to set up and provides a vital layer of protection. It provides peace of mind and is, in some ways, insurance.

Q: What are some of your personal passions and interests?

A: I am into tennis, and the reason I like tennis is because it is a lot of physical exertion which gives me relief from the mental exhaustion of thinking about complex tax matters. I also really like golf because it allows me to think in a Zen-like way.

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