What is Taxation Law?

A tax is a charge by the government on the income of an individual, corporation or trust, as well as the value of an estate or gift. There are also other forms of taxes, like consumer sales taxes, use taxes and real estate taxes. The objective in assessing tax is to generate revenue to be used for the needs of the public. A tax is not a voluntary payment but an enforced contribution exacted pursuant to legislative authority.

The IRS is responsible for administering and enforcing the internal revenue laws. It is part of the Department of the Treasury. For other relevant tax  definitions, visit the Tax Law Glossary in the FindLaw Legal Dictionary.

IRS Collections

If you don't pay in full when you file, you will receive a bill from the IRS. The first bill you receive will explain the reason for your balance due and require payment in full. It will include the tax due plus penalties and interest that are added to your unpaid balance from the date your taxes were due.

If you can't pay the balance in full, you should pay as much as you can with the notice. The unpaid balance is subject to interest which is compounded daily and a monthly late payment penalty. If you are unable to pay your balance in full, the IRS may be able to offer an individual payment plan based on monthly installments.

Tax Evasion

Tax evasion is when a person or a company purposefully underpays its taxes. Tax forms are long, the Internal Revenue Code is complicated, and unless you’re an accountant or other tax professional, you may make some mistakes that may result in underpaying taxes.

While you should always try to fill out your tax forms correctly, there’s no need to worry about being convicted for tax evasion over a simple error. To be convicted of tax evasion, the IRS must show that you deliberately tried to underpay your taxes. If you simply made an error, you’ll still have to pay what you should have paid, and possibly an additional fine, but you’ll avoid the time, expense, and penalties of a criminal trial.

Hiring a Tax Lawyer?

A tax lawyer will be able to identify key deductions, exemptions, and credits that could make a significant impact on your tax burden. In addition, a tax lawyer will be able to advise you on the type of tax-related activities that are illegal or that may trigger an audit by the IRS.

If you fail to file taxes or file your taxes improperly, you may need a lawyer to represent your interests. The IRS not only audits taxpayers who are under suspicion or who made errors in their paperwork, but also those who are part of a group targeted for greater scrutiny. If you become the subject of an IRS audit, you may want to consult with an attorney about the best course of action.

If the audit doesn't go your way, you can appeal the IRS's decision to federal tax court. Many lawyers specialize in defending taxpayers in federal court.

A qualified tax attorney should have an in-depth knowledge of the Tax Code and follow the changes in every area (code, cases, regulations, rulings) of tax law as they develop. If you run into any tax issues, be sure to contact an experienced tax lawyer in your area.

Related Legal Topics:

• Securities Law
• Business & Commercial Law 
• Banking & Finance Law