Tax season is upon us, and understanding how taxes work and can affect you is a significant part of being a tax payer. A recent mistake at Harvard has left many of its employees owing the IRS thousands of dollars in taxes. Roughly 11,000 employees were told that they owed as much as $3000 to $4000 in taxes on money they didn’t earn from 2009 to 2013, according to a report from The Boston Globe. Overall, Harvard reported almost $20 million in error in a letter apologizing for the mistake on Friday. The university promised to pay the money back and to help workers get refunds from the IRS.
Tax laws are important to the American people. Taxes are a monetary assessment enforced on individuals and businesses by the legislative branch of the government. Any type of tax mistake can affect a person or business both financially and legally, and laws are put in place to protect and prevent chaos from occurring. This means that an understanding of taxes at all levels, federal, state and local, is needed, and shows/demonstrates/explains why tax lawyers are a critical part of the American economy.
Examples of important tax law aspects:
Legalities. Tax laws provide all of the legalities that are present wherever taxation is concerned.
Protection. They protect tax payers and business tax payers to ensure certain taxes are levied.
Errors. Tax law helps to reduce errors when filing taxes. This is because they are deterring what is taxed, how it’s taxed, and to what extent it is taxed.
Security. One of the most important parts of tax laws are that they provide businesses and individuals with a sense of security, especially when planning an annual budget. They ensure tax rates are at a fixed amount, and if the amount is to increase, the business or individual will be notified.
Taxes surround our everyday lives, and any type of mistake, like the one at Harvard, can cause extreme chaos that can easily be avoided. The system of checks and balances put in place by the United States makes sure that mistakes like this are a rare occurrence, and if found, they are solved by the hard working tax lawyers who make sure the tax laws are always there to ensure clarity.