Tax Law in Memphis, TN
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 , Tennessee 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 Tennessee Department of Revenue states that, as of 2021, Tennessee no longer levies a state personal income tax. For tax years prior to January 2021, the state’s unique Hall Tax applied to income from interest and dividends, but not wages. Despite no longer owing this state tax, Memphis residents must still pay some taxes. For example, the City of Memphis taxes most real property at a rate of $2.713049 per $100 of assessed value. In addition, many Memphis purchases are subject to a 9.75% sales tax.
Tax Law Topics to Understand
If you find yourself facing , Tennessee 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.
An IRS audit is a review of an experienced Memphis, Tennessee 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 Memphis tax law attorney. They can help you to navigate the complex process ahead and offer advice as issues arise.
Tax evasion refers to any activity an individual or business in , Tennessee 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 Memphis, Tennessee 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 Memphis 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
Under Tennessee law, tax evasion through filing a false return is a class E felony. The penalties for this crime can include a $3,000 fine and up to 6 years in prison. With the elimination of the state’s income tax in 2021, this area of law may soon be subject to changes. Check with your Memphis tax attorney for the most current rules.
When Would You Need an Experienced Memphis, Tennessee 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 , Tennessee attorney who practices tax law. To illustrate, counsel can help collect the information you need and create a viable defense.
There’s more to starting a business in , Tennessee 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.
Tennessee imposes two types of Business Taxes, an excise tax and a franchise tax. Memphis businesses can file and pay these together using one form. The excise tax is essentially a corporate income tax, applicable to corporations (both C and S) and LLC’s. On the other hand, the franchise tax applies to most business entities, regardless of organization type. In addition to these state taxes, Memphis businesses are subject to local tax and license fees. Furthermore, Memphis businesses must pay property taxes, with an additional tax in the city’s downtown area.
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.
Tennessee does not have a state estate tax. In addition, the state no longer collects an Inheritance Tax, as of 2015. However, large Memphis estates may still be subject to the federal estate tax.
Work with an Experienced Tax Law Lawyer In Memphis, Tennessee
Facing issues related to tax law can feel overwhelming. No one wants to go head-to-head with the IRS. Experienced , Tennessee 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 Tennessee 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!