If an individual or a business refuses to pay back taxes, tax liens are the last resort to force repayment. A tax lien is a legal claim by a government entity against a noncompliant taxpayer's assets. To get rid of a lien, the taxpayer must pay what he or she owes, get the debt dismissed in bankruptcy court or reach an offer in compromise with the tax authorities. Federal and state governments may place tax liens for unpaid federal or state income taxes, while local governments may place tax liens for unpaid local income or property taxes. If the taxes remain unpaid, the tax authority can then use a tax levy to legally seize the taxpayer's assets (such as bank accounts, investment accounts, automobiles and real property) in order to collect the money it is owed. Tax liens are publicly recorded and may be reported to credit agencies. These two features of tax liens effectively prevent the sale or refinancing of assets to which liens have been attached, and prevent the delinquent taxpayer from borrowing money.
The reason behind not paying taxes may be of two types:
The consequences for not paying one's back taxes differ. IRS may send written notices regarding back taxes and usually expect a response in 30–60 days. A penalty fee is issued if the taxes remain unpaid. The minimum penalty fee is $135. Also, one has to pay interest on the unpaid taxes. The interest rate is usually determined by the federal short-term rate.
In response to widespread concerns about a general increase in the temperature of the earth's climate, a number of tax jurisdictions have proposed or imposed global warming taxes intended to generate revenues to mitigate the effects of the human activities contributing to global warming or to discourage such activities.
When failing to file a tax return the IRS will do so for you. Based on various records and W-2 forms from employers they accurately assess tax returns. IRS filled tax returns give the fewest tax deductions and credits possible. Unpaid taxes on these replacement returns give arise to back taxes.
This is the most common reason behind back tax emergence. In this case the person that failed to pay taxes by the deadline is not only obligated to pay the original tax, but in addition will be charged a "failure to pay" penalty.
In this case it may even be so that the person filled his tax returns and even paid the taxes. But failing to declare all income will arise back taxes. The IRS gets information from third parties such as banks, businesses (e.g. copies of peoples W-2 forms), meaning they have an accurate picture about peoples incomes. If the IRS notices a discrepancy between a persons report and the records they send a Proposed Tax Change Notice. If so, a person may either dispute the taxes owed or simpy make arrangements to pay the proposed sum (plus fines). The notice deadline is 45 days.
* Filling a return without completely paying all taxes when they are due
One may be assessed back taxes for one of the following three reasons:
Corporate taxes include taxes on corporate income in Canada and other taxes and levies paid by corporations to the various levels of government in Canada. These include capital and insurance premium taxes; payroll levies (e.g., employment insurance, Canada Pension Plan, Quebec Pension Plan and Workers' Compensation); property taxes; and indirect taxes, such as goods and services tax (GST), and sales and excise taxes, levied on business inputs.
Individuals who have overpaid taxes or had excess tax deducted at source will receive a refund from the CRA upon filing their annual tax return.
Separate provincial sales taxes (PST) are collected in the provinces of British Columbia, Saskatchewan, Manitoba (Retail Sales Tax or RST) and Quebec (Quebec Sales Tax or QST, French: Taxe de vente du Québec or TVQ). Prince Edward Island switched to a HST on April 1, 2013, the same date that British Columbia reverted to a separate GST/PST after their adoption of a HST in 2010 was rejected in a referendum. Goods to which the tax is applied vary by province, as does the rate. In all provinces where the provincial sales tax is collected, the tax is imposed on the sale price without GST (in the past, in Quebec and Prince Edward Island, PST was applied to the combined cost and GST). Of the provincial sales taxes, only the QST (and the HST) are value-added; the rest are cascading taxes.
The table below includes state and local taxes and fees. The American Petroleum Institute uses a weighted average of local taxes by population of each municipality to come up with an average tax for the entire state. Similarly, the national average is weighted by volume of fuel sold in each state. Because many of the states with the highest taxes also have higher populations, more states have below average taxes than above average taxes.
In the years since being created, state fuel taxes have undergone many revisions. While most fuel taxes were initially levied as a fixed number of cents per gallon,, nineteen states and District of Columbia have fuel taxes with rates that vary alongside changes in the price of fuel, the inflation rate, vehicle fuel-economy, or other factors.
Then-Secretary of Transportation Mary Peters stated on August 15, 2007, that about 60% of federal gas taxes are used for highway and bridge construction. The remaining 40% goes to earmarked programs. However, revenues from other taxes are also used in federal transportation programs.
Earnings before taxes (EBT) is the money retained by the firm before deducting the money to be paid for taxes. EBT includes the money paid for interest. Thus, it can be calculated by subtracting the interest from EBIT (earnings before interest and taxes).
These taxes mainly fund airport and Air Traffic Control operations by the Federal Aviation Administration (FAA), of which commercial aviation is the biggest user.
Ontario negotiated a tax collection agreement with the federal government under which its corporate income taxes would be collected on its behalf by the CRA starting in 2009.
Corporate income taxes are collected by the CRA for all provinces and territories except Quebec and Alberta. Provinces and territories subject to a tax collection agreement must use the federal definition of "taxable income", i.e., they are not allowed to provide deductions in calculating taxable income. These provinces and territories may provide tax credits to companies, often in order to provide incentives for certain activities such as mining exploration, film production, and job creation.
Quebec and Alberta collect their own corporate income taxes, and therefore may develop their own definitions of taxable income. In practice, these provinces rarely deviate from the federal tax base in order to maintain simplicity for taxpayers.