Tax Law in Florida

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 Florida 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.

Florida is one of the seven states in the U.S. that does not collect a state income tax. In fact, the Florida Constitution prohibits such a tax. However, according to the Florida Tax Guide, the state does collect tax in other ways. For example, Florida has a 6% sales tax, with exceptions for groceries and medicine. In addition, local jurisdictions can charge additional sales tax, as well as property taxes.

Tax Law Topics to Understand

If you find yourself facing Florida 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 , Florida 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 Florida 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 Florida 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 Florida, you can face hefty fines, prison time, or both.

Income Tax Fraud

Income tax fraud is the willful attempt to evade or defraud the IRS and Florida 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

Since Florida does not have a state income tax, any personal income tax fraud or evasion is a federal crime. Federal tax fraud convictions can result in fines of as much as $500,000 and up to 5 years in prison. However, state level tax fraud in Florida is still a crime. Typically this charge involves fraud in the collection of sales tax or corporate income tax evasion.

When Would You Need an Experienced Florida 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 Florida 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 Florida 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.

Although individuals do not pay state income tax in Florida, the same is not true for many businesses. According to the Florida Department of Revenue, most entities that conduct business in the state must file a Florida tax return. However, sole proprietorships are exempt from this requirement. Keep in mind, though, that filing a return is not the same as owing taxes. Some business organizations, such as S corporations, do not have to pay Florida state income tax. For 2021, the tax rate is 3.535%, but it will increase to 5.5% in 2022.

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.

Florida, like many states, does not assess a state estate tax. According to the Florida Department of Revenue, a 2005 change in federal law made the Florida estate tax statute inoperable. However, because of the way this law is written, a state lien can still automatically attach to the estate. To avoid this, the estate representative must file an affidavit stating that no Florida estate tax is due.

Work with an Experienced Tax Law Lawyer in Florida

Facing issues related to tax law can feel overwhelming. No one wants to go head-to-head with the IRS. Experienced Florida 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 Florida 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!