Tax laws are created and enforced by local, regional, state, and federal government entities, including cities, townships, schools, utility companies, transit districts, and agencies. Tax law applies to direct and indirect payment of taxes. An example of a direct tax would be the payment of income tax to the federal government. Indirect taxes, on the other hand, are paid when a retailer charges you taxes on a purchased item and then pays that amount to the government.
The federal tax law is highly complex, constantly evolving, and is administered by a bureau of the U.S. Treasury known as the Internal Revenue Service (IRS). With regard to federal income and estate taxes, there is a special trial court with 19 presidentially appointed judges that handle disputes between taxpayers and the IRS. Decisions made by the tax courts can be appealed, with final review by the U.S. Supreme Court when circumstances deem it necessary.
And tax laws are constantly being revised and reformed. For example, in 2017, President Trump signed into law a major tax reform that significantly impacts both businesses and individual taxpayers. This new law, dubbed the Tax Cuts and Jobs Act, will be a benefit to some and a disadvantage to others.
What does a tax attorney do?
A tax attorney can help with more than filling income taxes. In addition to offering guidance and ensuring that you maximize deductions, a tax attorney can:
- Appeal a decision made by the tax court
- Help you or your business save money
- Ensure that you take advantage of tax credits
- Help you navigate tax codes
- Structure business entities
- Oversee tax planning for your business
- Help you set up international business contracts
- Advise on estate and financial planning
- Assist with IRS disputes
- Defend you against tax-related crimes
Tax laws can be complex and cause taxpayers anxiety, stress, and money. But some tax laws have very real benefits. Consider the child tax credit and its recent increase.
“As we approach the 2019 tax-filing season, I want to remind taxpayers to take advantage of this valuable tax credit if they are eligible to claim it,” says IRS Commissioner Chuck Rettig. “Tax reform changed the tax code significantly and doubling the Child Tax Credit is an example of how the changes impact taxpayers.”
In addition to helping to avoid pitfalls, a tax attorney can ensure that you reap any benefits available to you.
Hire an experienced tax attorney.
If you are involved in any type of tax dispute, a tax attorney can help. From simple audits to appeals to the U.S. Supreme Court, a lawyer specializing in tax law is essential if you are dealing with a tax-related issue. Many tax attorneys also have a background in accounting, which can be of immense benefit in certain situations. Taxation is a dauntingly complex area of the law. Don’t attempt to navigate this process on your own. An experienced tax attorney can make all the difference in the world.