Everyone should know the basics of tax law, whether you are a business owner or an employee. Most people are aware that you get into serious trouble if you dodge paying taxes, which is incentive enough to follow the law. If you are fascinated by the many aspects of tax law, you might consider a career in the field. The following is an overview on what tax law involves and how you can get into an exciting tax law career.
Tax law is a specialized area of legal study that deals with common law, constitutional, statutory, tax treaty, and regulatory rules that make up the law as it applies to taxation. The legal basis of the federal tax law in the US is the Internal Revenue Code, which is the regulatory interpretation by the Treasury Department of federal tax laws. Federal tax laws are passed by the US Congress and carry the weight of law under reasonable interpretation. Tax court and other federal courts deal with tax treaties and case law, which make up the remainder of tax law in the US.
Businesses and tax law
When you decide to start a new business, it is best to hire a lawyer and an accountant to assist with the many complex requirements related to tax law. If you plan to hire employees, you must know how to handle tax reporting for full-time employees compared to independent contractors. Setting up payroll taxes to meet legal requirements is another important factor.
It is crucial to be precise when you file taxes for your business, including home-based businesses. You will need to file business income taxes and have a knowledge of things such as tax forms and amended tax returns. Your business will be responsible for year-end payroll tax reports, such as W-2 forms for employees and 1099-MISC forms for any independent contractor. You also need to understand W-3 and 1096 forms. It might benefit you to hire a Certified Public Accountant who specializes in taxes to assist you.
Tax dodging trouble
There are serious repercussions for tax evaders, including a penalty on the tax owed plus interest. If you fail to pay on time, you usually receive a letter from the IRS requesting your response in as little as 30 days. If you don’t respond, they might withhold future refund money due to you, take your Social Security, and claim your property in the form of a federal tax lien. Expect any of your assets to be sold, and debts to the IRS often appear as debt on your credit report. At some point, the IRS may have you summoned. Individuals who willfully avoid filing or file fraudulently might serve jail time, so the trouble caused by not paying taxes or committing fraud is not worth the risk.
How to get into a tax law career
If tax law seems like an interesting career path, then here are some of the requirements and how you can get started. Law students often take at least a few tax courses to complete the requirements to earn their Juris Doctor and to take the bar exam. It is important to note that the bar exam must be taken in your specified state. The Juris Doctor generally requires a bachelor’s degree, passing the Law School Admission Test, and credit requirements.
If you are seeking a Master of Law degree, you should look for an accredited university. You will need to be a graduate of a law school that is accredited with the American Bar Association to be a candidate for this degree. Villanova’s online Master of Law in Taxation, for example, allows you to specialize in tax law. The Master of Law is considered an advanced legal study, and this program usually focuses on domestic and international taxation. It generally requires that you first earn your Juris Doctor or first degree in law and pass an English proficiency test for non-native English speakers.
Once you have earned the appropriate education, you are on your way to beginning your career in the field of tax law. You will be considered an expert in your field with the knowledge that you need to work with businesses, governments, and anyone who needs assistance with tax law.
Tax law knowledge is useful for everyone from contract workers to employers. Understanding and following tax laws will keep you free from certain legal concerns. Many businesses find it useful to hire a tax lawyer to assist them. Those who are interested in pursuing a career in tax law should know that it is an exciting specialized field where you help others with important legal matters.