Tax Law

What is Tax Law?

Tax law is the body of rules and procedures under which a government collects revenue from its citizens and corporations. Unlike areas of law that govern disputes between private parties, tax law specifically manages the financial obligations between a taxpayer and the government. The goal is to fund public services by ensuring compliance while providing a system for taxpayers to plan, dispute, and resolve their tax liabilities.

Common Examples of Tax Law:

  1. IRS Audits and Appeals: Representing individuals and businesses before the IRS during an examination (audit) and handling the administrative appeals process if the taxpayer disagrees with the outcome.

  2. Business Tax Planning: Advising companies on how to structure transactions, select the proper business entity, and manage operations in the most tax-efficient way possible.

  3. Estate and Gift Tax Planning: Helping individuals create strategies to transfer wealth to family members and heirs while minimizing federal estate and gift tax liabilities.

  4. International Tax Compliance: Assisting U.S. citizens and multinational businesses with their obligations related to foreign income and assets, such as reporting foreign bank accounts (FBAR).

  5. State and Local Tax (SALT): Resolving issues related to non-federal taxes, including disputes over sales tax, property tax, and state income tax for businesses operating in multiple states.

Tax Law FAQs

  • Not necessarily. The IRS sends notices for many reasons, including math errors, balance inquiries, or requests for more information. You should read the notice carefully to understand its purpose and consult a tax professional before responding.

  • Generally, the IRS has three years from the date you file to initiate an audit, which is known as the statute of limitations. However, this period can extend to six years for a substantial understatement of income, and there is no time limit for cases involving fraud or a failure to file a return.

  • You should voluntarily file your past-due returns as soon as possible to minimize interest and penalties and prevent more serious collection actions. A tax professional can help you prepare these returns and explore IRS programs designed to help you get back into compliance.

  • If you can't pay your tax liability in full, you may qualify for an IRS resolution program. These can include an Installment Agreement to make monthly payments or an Offer in Compromise (OIC), which allows certain taxpayers to settle their debt for less than the full amount owed.

  • Tax avoidance is the legal use of the tax code to reduce your tax liability, such as claiming all eligible deductions and credits. Tax evasion is the illegal, willful act of not paying or underpaying taxes owed, which is a criminal offense that carries severe penalties.