What Is Tax Law?

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  • Written By: Felicia Dye
  • Edited By: Melissa Wiley
  • Last Modified Date: 14 April 2014
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Tax law refers to the legislation that regulates the process of government collecting money from citizens or businesses. This money is usually a major source of revenue for governments, but laws are needed to ensure that it is taken in a just and fair manner. Tax law, therefore, tends to outline who must pay taxes and the rate at which they can be taxed. Legislation also addresses situations that may arise in the course of collecting and paying these dues, such as qualifying for exemptions or seeking remedy for non-payment.

It is common for this type of legislation to be referred to as administrative law or public law. Administrative law refers to regulations that are outlined by a government agency. In the United States, for example, much of the tax law is developed by the Internal Revenue Service (IRS). Each state also has its own taxation agency. In some places, tax legislation is known as public law, which defines a category of regulations that affect a government’s interaction with the public and vice versa.


One of the first things that tax law usually does is establish a government’s authority to collect these funds through a particular agency. Once this has been done, a process needs to be put into place to determine how it will be collected. Sometimes, as is seen with sales tax, it is collected on a regular basis. In other instances, taxes may be collected on a periodic basis, such as annual or quarterly payments. This is often seen in instances such as those involving the income taxes due from self-employed individuals.

For the tax collection system to be fair, it must be determined not only who must pay, but how much they should pay. There are some taxes, such as those imposed on the sale of goods, which are usually charged at a flat rate for everyone. For example, two cents may be charged for every dollar spent, no matter who is making the purchase. In other cases, such as with income taxes, the rates charged are often affected by a number of factors, including the amount of money earned, exemptions that apply to certain portions of a person’s income, and the type of business that the tax is imposed upon.

Other issues that are addressed by tax law include instances of non-payment. Legislation often outlines civil procedures such as notifying individuals of their overdue tax bills and permitting the garnishment of wages if the situation is not rectified. In some instances, failure to adhere to tax law is viewed as a criminal offense, and the minimum and maximum consequences may be expressed.


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