Tax Law in Kansas
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 Kansas 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.
Tax Foundation reports that the Kansas State Legislature recently overturned a veto by the governor and enacted sweeping changes to the state’s tax policy. SB 50 adopts and extends safe harbor policies to all small businesses in the state. In addition, Global Intangible Low-Taxed Income will now be excluded from the state’s tax base. For more information you can consult the Kansas Individual Income Tax Booklet.
Tax Law Topics to Understand
If you find yourself facing Kansas 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 Kansas 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 Kansas 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 Kansas 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 Kansas, 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 Kansas 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 Kansas State Legislature enacts penalties against any individual who fails to file a tax return, or who purposely withholds taxable income. Tax evasion in Kansas is a felony. If found guilty, the perpetrator can face up to 5 years in prison, and $100,000 for each count against them.
When Would You Need an Experienced Kansas 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 Kansas 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 Kansas 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.
The Kansas Department of Commerce states that businesses whose income is derived solely from transactions within the state are under a 4% corporate tax rate on net income. All net income beyond $50,000 is subject to a 3% tax rate. In addition, the state laws allow a business to carry net losses forward into the next taxable year, up to 10 years.
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.
Kansas Tax Law does not include an estate tax. Kansas is 1 of 38 states to reject the practice of attempting to tax an estate after the owner has passed. However, this exemption in Kansas does not exempt you from a federal estate tax. If you are facing this predicament, it’s best to have an experienced Kansas attorney by your side.
Work with an Experienced Tax Law Lawyer in Kansas
Facing issues related to tax law can feel overwhelming. No one wants to go head-to-head with the IRS. Experienced Kansas 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 Kansas 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!
