In short, tax law is the legal term that describes the broad set of laws that relate to the assessment, payment, and nonpayment of taxes that are imposed by governmental authorities at the local, state, and national levels. It is important to note there are numerous tax codes and laws that fall under the umbrella of tax law.
As such, a tax lawyer must be able to understand a variety of different legal concepts and laws in order to assist their clients with their specific tax needs. Tax lawyers’ main job is to assist their clients in understanding the tax codes and laws that are impacting them, whether it be personal income taxes or corporate taxes, and help them, in turn, to minimize their tax liability. Further, a tax lawyer can also assist their clients if there is a tax dispute by protecting their interests.
Examples of common responsibilities of tax attorneys include, but are not limited to:
- Structuring transactions for their clients in order to obtain the most advantageous tax position;
- Advising their clients on estate planning strategies in order to minimize tax liability;
- Researching various tax laws and regulations, especially in regard to newer tax legislation;
- Designing organizational structures for business or corporate clients in order to ease the burdens of taxes on the business;
- Representing clients who are being audited or investigated by the Internal Revenue Service (“IRS”);
- Assisting charities or nonprofit organizations with obtaining tax-exempt status for their organization;
- Advising business entities that conduct international business with contracts, tax liabilities, or other international tax matters.
Corporate Tax Lawyers
As mentioned above, one area of tax law in which a tax lawyer may assist their client is corporate taxes. A corporate tax, also known as a corporation or company tax, is a type of fee the federal government imposes on a business’s profits. Importantly, the federal corporate tax rate is subject to change.
Additionally, states may also impose their own separate corporate income tax rates in addition to the federal corporate tax. However, not every state applies a state corporate income tax rate, and those that do generally have rates that vary considerably based on jurisdiction.
Aside from federal and corporate taxes, a corporation may also pay taxes that are specific to the circumstances of the corporation. Examples of common corporate taxes that a business may pay include:
- Employment or Payroll Taxes: This is a percentage that gets taken out of an employee’s paycheck, which may be used to pay off taxes such as those for social security benefits, Medicare, or unemployment;
- Real Estate Taxes: Businesses may need to pay real estate taxes on property that it owns, such as if a corporation owns the building in which it operates;
- Estimated Taxes: Businesses may need to make installment payments on taxes periodically throughout a given tax year, which is generally required when a business expects to owe $500 or more in federal income taxes;
- Franchise Taxes: States may place a special kind of tax on businesses that want to operate or remain open in their specific state, known as a “franchise tax”;
- Excise Taxes: Excise taxes are taxes that are only applied to specific goods, such as alcohol, gasoline, cigarettes, some luxury goods, and other items regulated by various tax laws.
The following is a list of other articles offering guidance on corporate tax laws:
- What are Corporate Tax Lawyers?
- Are All Corporations Subject to the Accumulated Earnings Tax?
- Tax-Free Contribution to Corporation in Exchange for Stock?
- Corporate Tax Attorney
Income Tax Lawyers
Income tax is the tax on the percentage of a person’s earnings due to both the state and federal governments. Income taxes are collected each year on April 15. The amount of tax that a person owes is typically calculated by subtracting any permitted deductions from their income.
Federal income tax laws are based on the Internal Revenue Code (“IRC”), which includes the rules and regulations regarding federal income tax. Nearly every person or business that has earned an income in the United States is subject to income taxes. This includes persons or entities who are not United States citizens so long as they earned income from a source in the United States.
The following is a list of other articles offering guidance on income tax laws:
- What Is Income Tax?
- Legality of Not Paying Your Income Taxes
- Income Tax Audits
- Can I Really Lower My Income Taxes By Making Charitable Donations?
- Do I Have to Pay Income Taxes After Filing Bankruptcy?
- Personal Exemptions for Taxpayers
International Tax Lawyers
In legal terms, the term international tax law refers to the set of tax laws that govern how much taxes must be paid by a United States citizen that receives income from a foreign country or Foreign nationals and foreign corporations that receive income from within the United States.
International tax attorneys are attorneys that practice in international tax laws and assisting foreign nationals and corporations or United States citizens that receive income from outside the United States. Specifically, tax attorneys will be attorneys that are knowledgeable of international tax treaties that prevent double taxation.
The following is a list of other articles offering guidance on international tax laws:
- What is International Tax?
- Foreign Students and International Taxes
- How Do I Know Where My Tax Home is Located?
- Residence Test for International Taxes
Property Tax Lawyers
Property tax lawyers are lawyers that handle cases involving taxes that are assessed on property that a person or business owns. In many states, real property or real estate is taxed on an annual or quarterly basis. However, some states also tax personal property, such as an individual’s motor vehicle.
The amount of property taxes that a person or business must pay largely depends on the state in which they live or operate. Although each state has a different tax rate for property, taxes are generally based on a percentage of the property’s appraised or assessed value.
It is most common for local officials to determine the value of the property by performing an appraisal or assessment of the property and then applying the tax rate for that locality. In many areas, an individual’s property tax bill may include:
- County or state taxes;
- City or town taxes;
- School taxes.
The following is a list of other articles offering guidance on property tax laws:
- Are There Tax Benefits to Owning a Home?
- My Property Tax is Very High. What Should I Do?
- Unpaid Property Tax Issues
- Personal Property Tax
- What Is Property Tax?
Tax Evasion Lawyers
Tax evasion is a criminal action that involves an individual or corporation providing false or insufficient information to the IRS in order to avoid paying taxes. A falsification made to the IRS may involve intentionally misrepresenting tax information, inflating deductions, unreported income, or transferring income to offshore accounts.
Tax evasion lawyers are lawyers who represent their clients during an audit or in a court of law when a tax dispute arises.
The following is a list of other articles offering guidance on tax evasion:
- What Is Tax Evasion?
- How Can You Tell the Difference Between Tax Evasion and Tax Avoidance?
- Employment Tax Evasion
- Defenses to Tax Evasion
- Tax Fraud
A taxpayer may be subject to a tax audit if the IRS does not believe that they have paid their fair share of taxes or that they have deducted items that should not have been deducted. During an income tax audit, the taxpayer will meet with an IRS representative who may ask specific questions regarding their tax returns.
This meeting is to ensure that the taxpayer did, in fact, provide a full report of their income and that any deductions that were declared were lawful and appropriate. If the IRS representative determines that the taxpayer was honest, the case will be closed.
However, if the IRS discovers that the taxpayer was lying or did not report specific income that should have been reported, that taxpayer will likely be subject to supplemental taxes and monetary penalties. As such, it is imperative that taxpayers maintain records of their past tax returns, as well as expense records, in order to support their deduction claim.
A small business may also be audited. This means that the business’s financial records, policies, and procedures will be reviewed in order to ensure that the business is in compliance with applicable tax laws and regulations. This audit may be done internally by the business owner in order to better their business voluntarily. Alternatively, an external auditor may conduct an IRS audit of the business.
The following is a list of other articles offering guidance on tax evasion:
Do I Need a Tax Law Attorney?
If you have any questions regarding a specific area of tax law or if you are being audited, you should speak with an experienced local tax lawyer.
An experienced tax lawyer will be able to answer any question you may have, as well as represent you throughout any tax dispute process. Finally, an attorney will also be able to represent you in court as needed.