What is Tax law?
It covers the rules, policies and laws that oversee the tax process, which involves charges on estates, transactions, property, income, licenses and more by the government. Taxation also includes duties on imports from foreign countries and all compulsory levies imposed by the government upon individuals for benefit of the state.
The intricate body of tax law covers payment of taxes to a minimum of four levels of government, either directly or indirectly. Indirect taxes are assessed against products and services that are meant to be consumed, but are paid to an intermediary. For example, when you buy coffee at a local corner store, the retailer charges you tax on your coffee, which he/she subsequently pays to the government. Direct taxes are those you pay directly to the government and are imposed against things like land or real property, personal property, and income.
There is a seemingly endless list of entities that create and enforce tax laws and collect tax revenues. They range from the local government level, such as cities and other municipalities, townships, districts and counties to regional, state and federal levels. They include agencies, transit districts, utility companies, and schools, just to name a few.
The area of tax law is exceedingly complex and in constant flux largely due to two reasons. The first is that the tax code has been used increasingly more often for objectives other than raising revenue, such as meeting political, economic and social agendas. The second reason is the manner in which the tax code is amended.
The Federal tax law is administered primarily by the Internal Revenue Service, a bureau of the U.S. Treasury. The U.S. tax code is known as the Internal Revenue Code of 1986 as amended (Title 26 of the U.S. Code). Other federal tax laws are found in Title 26 of the Code of Federal Regulations; proposed regulations issued by the Internal Revenue Service (IRS); temporary regulations issued by the IRS; revenue rulings issued by the IRS; private letter rulings issued by the IRS; revenue procedures, policy statements, and technical information releases issued by the IRS; and federal tax court decisions. Tax law for state and local government is also contained in codes sections, regulations, administrative codes, procedures and statements issued by the respective government authorities, as well as state court decisions.
There is a special trial court which hears disputes between the IRS and taxpayers regarding federal income, estate and gift tax underpayments – the U.S. Tax Court. This federal court is based out of Washington, but its 19 presidentially appointed judges travel to preside over trials in courts located in several designated major cities. The Tax Courts’ decisions may be appealed to the Federal District Court of Appeals and final review is retained by the highest court in the land, the U.S. Supreme Court.
Tax attorneys serve many important functions in the complicated arena of tax law. They may represent you throughout the various stages of tax disputes, from an initial audit to IRS administrative appeals, Tax Court and final review by the Court of Appeals, or even the U.S. Supreme Court. They are also invaluable in helping you navigate the intricate and bewildering laws in this area of practice.
Tax Law Definition
Taxation is a governmental assessment upon property value, transactions, estates of the deceased, licenses granting a right and/or income, and duties on imports from foreign countries. It includes all contributions imposed by the government upon individuals for the service of the state. Taxes are usually divided into two main classes: direct and indirect. Generally speaking, direct taxes are those assessed against income, land or real property, and personal property, which are paid directly to the government; whereas indirect taxes are assessed against articles of consumption, such as products or services, but collected by an intermediary, such as a retailer.