Taxation Facts

• Tax law involves the taxation of income and property acquired through personal and professional efforts. In addition to income tax, there is sales tax, gift tax, inheritance tax, capital gains tax, property tax, and a myriad of other areas of tax.
  
• From the Government's perspective, statutes of limitation restrict the taxpayer's right to claim a refund of overpaid tax or initiate litigation to obtain a refund. From the taxpayer's perspective, statutes of limitation prevent the IRS from collecting a deficiency in tax or beginning a civil or criminal case. In short, statutes of limitation provide a date of finality after which actions taken by the IRS or the taxpayer cannot be disturbed by the other party.
  
• There are scores of deductions and credits that taxpayers can qualify for, including the earned income tax credit, child tax credit, and deductions and credits for college education.
  
• Tax law is divided into both federal tax and state tax. Federal Income tax became law in 1913 when the Sixteenth Amendment to the U.S. Constitution was ratified. While some states do not have an income tax, all residents and citizens of the United States are subject to federal income tax. The more assets that an individual owns, unfortunately, the more complicated the tax law becomes.
  
• You may represent yourself in Tax Court. Only you can decide whether or not you need legal assistance. If you decide that you need legal assistance, the Tax Court will recognize only persons who are admitted to the bar of the Court.
  
• If you bought your home more than a couple years ago, and haven’t kept up on the local market, you might not realize how much your property has appreciated. Changes in the local real estate market can have a tremendous impact on the value of your property.
  
• Your tax assessment likely contains specific information relating to what you need to do. Read it carefully.
  Normally you must request a hearing before the body that does assessments. At the hearing you must provide evidence relating to why the assessment is improper. The body will take your evidence under consideration and eventually make a ruling on the assessment. Under state law, you may have the right to an appeal before the governing agency, or to your state’s courts.
  Your state may have also have mediation provisions for assessment appeals.

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	Did You Know?
	Form 5471 is Information Return of U.S. Persons With Respect to Certain Foreign Corporations Report information with respect to certain foreign corporations. A domestic partnership may have to file Form 5471 if it: Controls a foreign corporation; or Acquires, disposes of, or owns 5% or more in value of the outstanding stock of a foreign corporation; or Owns stock in a corporation that is a controlled foreign corporation for an uninterrupted period of 30 days or more during any tax year of the foreign corporation, and it owned that stock on the last day of that year.