Tax Problem in America Business & Marketing Essay Paper

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Taxation in America
Corporation taxes are vital for any nation. To that end, in America IRS sees to it that all companies pay taxes. It ensures that those companies that fail to execute their duty of paying taxes face aggressive implications. Companies should be committed to paying taxes. Additionally, they should utterly understand the federal, state, and local tax requirements to be in a position to file their taxes accurately and make payments on time. The following paper will focus on how an American company legally pays taxes. A discussion on the tax mistakes that companies make and how they can evade them will also be established.
Organizations should pay taxes because of a number of reasons. Firstly, the profits made by these organizations rely on tax-financed public goods, infrastructure, property rights, literate and healthy workers and property and contract rights. Secondly, abuse of tax by organizations would benefit the Wall Street at the expense of the main street businesses, which is unlawful and unfair to benefit themselves at the expense of a certain group of individuals. Lastly, organizations should aid the growth of the countries business capacity by paying tax for the betterment of the economy at large (Mintz, and Chen, 2015).
As stated earlier different organizations pay different types of taxes but some of these taxes are universal. The first type of tax paid by organizations is income tax. This is the tax levied by the government on the annual income (Whitney). Organizations pay income yearly from their gross income. The higher the income an organization makes the larger the amount paid progressively.
The federal government imposes a tariff commonly known as duty on the value of imported goods. This is usually to promote local markets by making imported goods expensive (Mintz, and Chen, 2015). This makes the demand for locally made product high and thus better profits. These tariffs differ according to product categories and product classification and their origins. Organizations also pay property tax on the asset or rather real estate based on the value of the assets. Excise tax and estate are the last two taxes paid by the business. Excise is the tax paid by organizations for purchasing and producing commodities (Whitney). Products and services affected by excise tax include petroleum, communication, tobacco, gambling, and transport. The estate tax does not usually affect organizations but it applies to family firms and other small-scale businesses that have values exceeding the accepted amounts.
However, according to section 501 of the IRS (Internal Revenue service) non-profit firms should not pay taxes. The sole reason for this is because non-profit organizations engage in activities both public and private without a money-making goal( Internal Revenue Service). However non- profit organizations should be in line with the following rules;
• They should be organized and operated for charitable, religious, public safety and scientific purposes.
• Pull together income and other forms of charity and hand over full amounts to people or organizations that are lawfully recognized as legitimate beneficiaries.
America has a tax system that every organization is supposed to follow. For instance, after every year the organizations are supposed to have met the government needs and plans. It is at this time that the organizations are doing the end of year math, profits, gross income, and other relevant calculations. This date is not necessarily at the end of the year, it is on any other date depending on the nation’s routines and business calendar Mintz, and Chen, 2015). Every organization is required to comply with this directive and the federal government enforces this dates and process by conducting random audits to check the books of these organizations. Any delay and defaults are punishable by law through hefty fines and even jail time. Organizations may even lose their business permits for trying to evade taxes or any other form of tax fraud.
Every year, a large number of companies in America make tax mistakes. While some taxes mistakes are negligible and might not attract the attention of the taxman, others can have the taxman take destructive legal actions against companies that commit the missteps. Some o...