Tax Law in Montana

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 Montana 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 Montana Legislative Branch states that the tax code for the state follows a progressive scale. It varies depending on the income generated by the individual earner. While Montana boasts one of the highest tax rates in the nation at 6.9%, it is also one of the few states that allows a resident to deduct their federal income tax against their state income tax. For more information on correct filing you can consult the Montana Forms and Filing for Taxpayers.

Tax Law Topics to Understand

If you find yourself facing Montana 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 Montana 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 Montana 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 Montana 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 Montana , 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 Montana 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

Failing to file a tax return, or deliberately underpaying your tax is categorized as fraud in the state of Montana. If convicted you can face jail time, as well as hefty financial penalties. However, the Montana Department of Revenue seeks to call attention to another type of income tax fraud. Scammers seek to acquire personal information about you, and then file a fraudulent income tax return hoping to collect the money.

When Would You Need an Experienced Montana 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 Montana 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 Montana 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 Montana Tax Code affirm that all businesses, both foreign based and domestic, which accrue profit in the state of Montana must pay corporate taxes, and file a corporate tax return. The corporate tax rate in Montana is set at 6.75% of net income. Many states tax LLCs differently than other corporations, but if your LLC is listed as a corporation in Montana, you will also have to pay this tax.

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.

Montana State University declares that there is no estate tax in Montana. If a Montana resident has left you real property, or assets, there is no tax to be paid on them. However, if you are a resident of Montana, and a decedent in another state has left you property or assets, you are bound by the laws of that state and must pay estate taxes. But only if they exist.

Work with an Experienced Tax Law Lawyer in Montana

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