Tax Law: An Overview for Individuals and Businesses

Tax law covers the rules for what's owed to the government and the process for resolving disputes when the IRS or a state tax authority disagrees with what was reported. Florida has no state personal income tax, which simplifies things for individuals, but Florida residents and businesses still deal with federal income tax, payroll tax, sales tax, and property tax — each with its own rules and its own enforcement agency.

Who enforces what

The IRS handles federal income, payroll, and estate taxes. The Florida Department of Revenue handles state-level taxes that do exist here — sales and use tax, corporate income tax, and reemployment (unemployment) tax. Local governments separately assess and collect property tax. A dispute with one doesn't necessarily involve the others, and each has its own audit and appeal process.

The general shape of a tax problem

Most tax law issues fall into a few buckets: an audit questioning what was reported, a debt owed after an audit or a return with unpaid tax, a penalty imposed for late filing or inaccurate reporting, or an allegation of fraud, which is a different and more serious category than an honest mistake. The right response depends heavily on which of these it actually is — treating an audit like an accusation of fraud, or vice versa, usually makes things worse.