Tax Law in Springfield, IL
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 , Illinois 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 state imposes a flat state income tax. Consequently, every Springfield taxpayer must pay the current state income tax rate of 4.95%, regardless of their income level. In addition, Illinois Policy reported that Springfield area residents pay some of the nation’s highest property tax rates. In fact, the City of Springfield reports that for 2022, property tax is the second largest revenue source for the City, behind sales tax.
Tax Law Topics to Understand
If you find yourself facing , Illinois 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 Springfield, Illinois 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 Springfield 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 , Illinois 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 Springfield, Illinois 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 Springfield 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
A Springfield resident who willfully fails to file a return or files a fraudulent return is committing a felony. Under Illinois law, a first-time violation is a Class 4 felony, and each subsequent offense is a Class 3 felony. For a first offense, the guilty party can face up to $25,000 in fines and up to 3 years in prison. Be aware, any Springfield resident can report suspected tax fraud to the Illinois Department of Revenue.
When Would You Need an Experienced Springfield, Illinois 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 , Illinois 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 , Illinois 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 Illinois Department of Revenue, Springfield corporations currently pay a 7% state business income tax. However, the City of Springfield offers some Enterprise Zone (EZ) Incentives to businesses. For example, all building materials purchased and incorporated into the new construction or rehabilitation of a building located within the EZ are exempt from sales tax. Additionally, new construction in the EZ may qualify for a property tax abatement. Furthermore, a Springfield taxpayer who invests in a EZ property may receive a state investment tax credit of 0.5%.
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 Illinois Attorney General administers the Illinois estate tax. For Springfield estates above $4 million, this tax ranges from .8% to 16%, depending on the value of the estate.
Work with an Experienced Tax Law Lawyer In Springfield, Illinois
Facing issues related to tax law can feel overwhelming. No one wants to go head-to-head with the IRS. Experienced , Illinois 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 Illinois 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!