Tax Law in Albuquerque, NM

Tax law refers to the regulations governing the calculating, filing, and paying of taxes. When handling tax law cases, attorneys may manage taxes at various levels, such as local, state, and federal. The practice of this type of law involves understanding, defending, and resolving issues related to payment or non-payment.

If you hire a qualified , New Mexico professional to handle your business or personal taxes, you may feel protected from disputes. However, even a misplaced comma or added zero can cause the IRS to believe you owe more than you do. In some instances, accountants might also take deliberate actions that result in legal and financial repercussions.

The City of Albuquerque levies a Lodger’s Tax on hotel room rentals and short-term rentals. The Albuquerque lodging establishment collects the tax and remits it to the City. Under City Ordinance, there is a Lodgers’ Tax of 5% and a Hospitality Fee of 1% on all room revenue. Additionally, the City has the authority to levy a tax on residential and commercial property. Bernalillo County assesses and collects the property tax, and then distributes it back to the City. According to SmartAsset, Bernalillo County’s average effective property tax rate is 1.05%, the second highest in New Mexico.

Tax Law Topics to Understand

If you find yourself facing , New Mexico taxation issues, understanding tax law and how it works can help. Most Americans have only basic knowledge of how the tax systems work, and with good reason. They are complex. Small business owners need to understand tax law and how it impacts their business. Here are some essential tax law topics to get you started.

IRS Audits

An IRS audit is a review of an experienced Albuquerque, New Mexico individual’s or an organization’s finances and accounts to ensure accuracy. The audit may also uncover discrepancies business owners were not aware existed.

These are just a few of the things the IRS looks for when conducting an audit:

  • Does your lifestyle match your income?
  • Are you passing off personal expenses as business expenses?
  • Are you overstating any of your business expenses?
  • Did you fail to report any business income or did you inflate that income?
  • Do your payroll taxes match that of your employees?
  • If your business handles a lot of cash,  are you diverting any of this into your own pocket?

If you are about to have your business audited, consider hiring a qualified Albuquerque tax law attorney. They can help you to navigate the complex process ahead and offer advice as issues arise.

Tax Evasion

Tax evasion refers to any activity an individual or business in , New Mexico engages in to reduce or avoid their tax liabilities. There are two types of tax evasion: evasion of assessment and evasion of payment.

Evasion of assessment means the taxpayer performed an action with the goal of defeating the assessment of a tax. The under-reporting of taxes is a common example of this. Evasion of payment means that you avoid paying the IRS by hiding money or assets that should become taxed. Here are some examples of tax evasion:

  • Keeping a double set of books
  • Overstating deductions
  • Destroying financial records
  • Concealing sources of income
  • Filing a false return
  • Making false invoices
  • Holding property in another person’s name to avoid taxation

If you are found guilty of tax evasion in Albuquerque, New Mexico you can face hefty fines, prison time, or both.

Income Tax and Fraud

Income tax fraud is the willful attempt to evade or defraud the IRS and Albuquerque tax laws. Tax fraud occurs when an individual or business does any of the following:

  • Prepares and files a false tax return
  • Willfully fails to pay taxes
  • Intentionally fails to file an income tax return
  • Intentionally fails to report income received
  • Makes fraudulent or false claims on the tax return

The City of Albuquerque’s Tax Preparer and Consumer Rights Ordinance went into effect on February 15, 2021. This Ordinance protects Albuquerque taxpayers from fraudulent activities by:

  • Providing taxpayers ways to address deceptive or unfair tax preparer practices
  • Ensuring that taxpayers receive ethical and competent tax preparation services
  • Requiring that tax preparers disclose key information to taxpayers

When Would You Need an Experienced Albuquerque, New Mexico Tax Law Attorney?

Facing Legal Issues Regarding Taxes

If you’re under investigation from the IRS or planning a lawsuit against, you will need a qualified , New Mexico attorney who practices tax law. To illustrate, counsel can help collect the information you need and create a viable defense.

When Starting a Business

There’s more to starting a business in , New Mexico than selling products or services. You also need to determine the business type and structure. This status, in turn, determines how the business and your earnings get taxed. Choosing the wrong business structure can cost you.

According to the Albuquerque Regional Economic Alliance, changes to New Mexico’s tax structure have made Albuquerque more competitive for the expansion of business. For example, regional headquarters and manufacturers may now elect the Single Sales Factor, which may reduce a company’s state corporate income tax liability. In addition, the state reduced its top corporate tax rate from 7.6% to the current rate of 5.9%. Furthermore, the state imposes a Gross Receipts Tax (GRT) instead of a sales tax. In the City of Albuquerque, the GRT rate is 7.875%.

If You Have a Taxable Estate

If your estate is worth more than $11.58 million, or $23.16 million if you’re married, your estate might get taxed up to 40% for surpassing that threshold. No one wants a huge portion of their estate going to the IRS instead of their heirs. This is why wealthy people involve tax lawyers in their estate planning process.

The estate of an Albuquerque decedent does not face any state estate taxes. According to the New Mexico Department of Taxation & Revenue, New Mexico does not impose an inheritance tax either. However, an Albuquerque estate may still need to pay federal estate tax.

Work with an Experienced Tax Law Lawyer In Albuquerque, New Mexico

Facing issues related to tax law can feel overwhelming. No one wants to go head-to-head with the IRS. Experienced , New Mexico tax law lawyers have the expertise you need. From conducting audits to defending you in court.  We can even help you connect with an attorney across New Mexico state lines.

Submit a request online or call us today at (866) 345-6784 to get in touch with an experienced lawyer in your area!

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