Stein Shares His Approach to Staying Tax Smart

Atlanta attorney Doug Stein spends his days doing something that sounds almost paradoxical: helping wealthy clients pay every dollar of tax they legally owe and not a penny more.

“We help people keep more of what they’ve built,” Stein says, describing his practice belying the complexity behind it. “Professionally, we concentrate on tax mitigation, estate planning, and M&A [mergers & acquisitions] work and helping our clients create and structure businesses to be tax efficient. Additionally, a growing piece of what we do is structuring private placement life insurance.”

He added, “There’s a wide legal gap between tax evasion and tax planning.” Some call it “a vast gray area.”

Stein’s path to becoming one of Atlanta’s go-to tax attorneys for high-net-worth entrepreneurs is peripatetic. Born in Albany, N.Y., he attended high school in Brookline, Mass., before heading south to the University of Maryland, where he earned an undergraduate degree in economics. He then attended Cardozo School of Law in New York, where he began his legal career as an attorney. He then moved to Detroit, before settling his family in Sandy Springs in 2008. His kids came up through Atlanta Jewish Academy, Torah Day School, and Temima, and they attend Congregation Beth Tefillah. Outside the office, Stein is a hiker and something of an adventurer.

Before striking out on his own, Stein worked at a large regional firm, Smith Gambrel (SGR). “Honestly, I loved it. SGR is where I cut my teeth, worked with sharp, interesting people, put in real hours, and came out the other side appreciating increased complexity. Some of what we do now at my firm traces back to the tax structuring work I learned there.”

Stein’s niche is assisting entrepreneurs who are navigating the collision of income tax and estate tax exposure. “Our sweet spot is entrepreneurs who have a combination of income and estate tax issues, clients that have complex tax issues, or who are in need of a new and broader perspective.”

Most of his clients carry net worths in excess of $5 million, though the majority are $15 million-plus with significant tax issues that require structuring.

Worrying about an audit? Stein mused, “The IRS appears to be woefully underfunded, undermanned, and stretched thin. Many of the more sophisticated agents have left or retired. While we are seeing fewer audits, they seem to be haphazard, going deeper and growing in complexity. The current agents aren’t necessarily well-versed in the issues.”

As for what actually triggers an audit, Stein is candid about the uncertainty.

“Despite what anyone may say, no one knows what causes an audit. I assume foreign bank accounts and crypto are subject to heightened scrutiny, but there is insufficient empirical evidence to really know.”

When it comes to wealth preservation, Stein sees the same errors repeatedly.

“Some of the biggest issues we routinely see are people who don’t have integrated plans for income tax and estate planning. Some of what works well for one may be detrimental to the other.”

His prescription is a holistic structure that accounts for every type of tax exposure paired with flexible estate plans. Stein points to fundamentals in building wealth.

“Fully funding a retirement plan or pension plan provides income tax deferral and asset preservation. The trusts we design today are structured with flexibility to accommodate future developments, opportunities, and unforeseen circumstances.”

Stein’s docket includes memorable disputes. In one case, the IRS challenged a client’s deductions for international business travel with elaborate events hosted in hotel suites abroad where Stein managed to successfully demonstrate the business purpose and defended the legitimacy of the deductions. He’s also represented clients in the cannabis industry, where tax rules are notoriously unforgiving.

The ubiquitous goal: “Identify lawful strategies that help minimize and reduce tax exposure while ensuring full compliance with applicable tax laws and regulations.”

For life outside the practice, Stein, an avid Scuba diver, traveled to Australia this past July to explore some of the world’s most celebrated dive sites. He enthused,

“Scuba diving allows me to disconnect from the fast pace of daily life and experience the quiet world beneath our surface. Some of the most amazing experiences can happen when you push yourself.”