One may argue that comprehending tax rules is an essential part of our civic duty as Americans. And it’s true: the law mandates you to file proper forms and pay your taxes on time. Failure to do so may result in audits, penalties, or even criminal charges of tax evasion.
In today’s article, you’ll understand the key elements of US tax laws. While we can’t possibly cover the entire system in one article, we’ll certainly walk you through the most important aspects to keep you informed.
Table of Contents
What Is Tax Law?
“Tax law simply refers to the regulations that govern the assessment, payment, and nonpayment of taxes that the authorities impose at the local, state, and national levels,” says Tax law attorney John Pontius of Pontius Tax Law, PLLC.
The IRC contains thousands of pages of detailed tax laws and exceptions. Combining this documentation, even for simple matters, can be difficult. You’ve also got to consider the legal language and technicalities, which can be overwhelming, to say the least. That’s why these matters are best left to individuals who are trained for them, i.e., tax lawyers. You’re better off consulting with a lawyer for all your tax issues.
Here is what they can do for you:
Advice
A tax lawyer can offer advice on the different tax codes at the state, federal, and local levels. With this information, you will understand what you should do to stay compliant and avoid troubles with the IRS.
Tax planning
As a business owner, you want to minimize the tax liabilities in your business transactions, and a lawyer can help you do just that. They can assist in designing business deals like mergers and acquisitions for tax efficiency. And when planning for the transfer of your assets to heirs, they will help you minimize estate taxes.
Tax compliance assistance
A lawyer can also help you meet your tax filing obligations and keep you informed about new legislation that may affect your responsibilities. And if the IRS penalizes you for violations, they will handle settlement negotiations on your behalf.
Representation during disputes
These professionals also represent clients in disputes with the authorities. They can help you during audits by providing necessary documentation and even negotiating settlements. If these disputes escalate to court, they will represent you and your business.
Specialized Areas of Tax Law
As we mentioned earlier, tax law is wide and complex. Most attorneys in this field focus on a specific area, including:
Corporate Tax
Involves taxing businesses at both the federal and state levels. Lawyers focusing on this area help with structuring business transactions to ensure tax compliance.
Income Tax
Applies to individuals and businesses in terms of their earnings. A lawyer in this field might help with filing personal tax returns, business tax strategies, and even tax disputes with the IRS.
International Tax
As you can tell from the name, this involves the taxation of cross-border transactions, foreign income, and multinational entities. Lawyers help with tax treaties to avoid double taxation on income earned in multiple countries. They can also assist with foreign income reporting and expatriate taxation rules.
Property Tax
This is based on the assessed value of a property. A professional in this field can help you navigate challenges with inaccurate property valuations that lead to higher tax bills.
When to Hire a Tax Lawyer
Up to this point, you have a basic understanding of what US tax law entails. For best results, it is crucial to hire an attorney specializing in your specific matter, whether corporate tax, international tax, or even property tax. With a deep understanding of the law, these professionals can help you minimize your tax obligations within the confines of the law. This is mostly done by designing tax-efficient strategies involving business deals, asset sales, or even wealth transfers.
Conclusion
Specializing in areas such as corporate tax, income tax, international tax, and property tax they can help minimize tax liabilities and safeguard your financial interests. When faced with tax-related challenges, enlisting a skilled tax lawyer is not just an option, it’s a necessity for effective legal and financial management.
