Explore federal and state taxation frameworks, IRS audits, business tax obligations, capital gains, and taxpayer rights under the Internal Revenue Code.
9 states have no state personal income tax. State sales, excise, and corporate franchise taxes vary widely across all 50 states.
Tax law encompasses the constitutional, statutory, regulatory, and common-law rules governing taxation by federal, state, and municipal governments. Tax law governs individual income, corporate profits, payroll, sales, property, capital gains, and international transactions, administered at the federal level by the Internal Revenue Service (IRS).
The primary federal statutory tax law passed by the United States Congress.
Official interpretations and administrative regulations issued by the Department of the Treasury.
Specialized judicial forum permitting taxpayers to dispute IRS deficiency notices before paying disputed taxes.
A deduction lowers your taxable income, while a tax credit directly reduces your tax liability dollar-for-dollar.
Audits are triggered by computer scoring (DIF scores), substantial income mismatches, unusually high deductions, or random statistical sampling.
Contractors must pay self-employment tax (15.3% for Social Security and Medicare) in addition to standard income taxes.
An IRS tax audit is a formal review of an individual's or business's tax accounts and financial records to ensure compliance with the Internal Revenue Code.
The IRS generally has three (3) years from the filing date to assess additional tax. This increases to six (6) years if gross income is understated by more than 25%, and there is no time limit for fraudulent or unfiled returns.
An agreement between a taxpayer and the IRS that settles a tax liability for less than the full amount owed, based on inability to pay.
File on time to avoid failure-to-file penalties, and request an installment agreement or payment plan from the IRS.