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Indirect Tax Law Questions

An Indirect Tax may increase the price of a good so that consumers are paying the tax by paying more for certain products. The degree to which the burden of a tax is passed on determines whether a tax is primarily direct or indirect. Below are commonly asked questions about Indirect Tax Laws that are answered by the Experts.

What is an official definition for the term “tax” or “taxation”?

Typically by definition a tax is a fee charged ("levied") by a government on a product, income, or activity. If tax is levied directly on personal or corporate income, then it is a direct tax. If tax is levied on the price of a good or service, then it is called an indirect tax.

What is an excise tax?

Excise tax is considered an indirect tax that is applied to anything besides personal property, income tax, or sales tax on a commodity, generally consumables like fuel, cigarettes, alcohol, etc.

If the tax on income is direct then is it apportioned? If it is an indirect tax is it uniform?

By definition the 16th amendment makes taxes indirect. However the meaning is regardless if the tax is deemed direct or indirect, but a person could argue that taxes on income are both.

If a person is a United Kingdom citizen and has Green Cards in the United States would they have to file a US tax return and be taxed under the dual taxation treaty until the cards expire And if the cards were canceled would they have to pay exit taxes?

In most cases if a person wanted to abandon their permanent residence, then that would allow the individual to end tax liability before the cards expire. If the individual decides to keep their Green Card they would have to come back to the US at least six months out of the year to keep citizenship status, or get a Reentry Permit. To be subject to exit taxes the person must have been a lawful permanent resident for at least eight out of fifteen taxable years ending with the year in which residency expires, or is terminated. Then they would be subjected to a tax on the net unrealized gain on their US properties and assets if said properties were sold at fair market value on the day before expatriation, if the net gain on the deemed sale exceeds US $600,000 (or US $1.2million for married individuals filing a joint return). The tax would be due on the 90th day after expatriation. Foreign assets would not be taxed unless the money used to purchase the asset was earned in the US.

How would a beneficiary protect themselves from a fraudulently when filing an estate tax return?

Typically if a person is not personally signing or otherwise responsible for a tax return, then they are not liable. However if they are a beneficiary of a trust/estate that they believe fraud is being committed it is in their best interest to report it. Also as the beneficiary of a mishandled trust, they may be able to press charges and file a civil suit, or possibly criminal charges, and sue for money back, plus damages. The Internal Revenue Service will take their information. Here is the contact information that will point them in the right direction:,,id=106778,00.html

Indirect tax laws can provide the answers to many questions and sometimes it can create more questions and problems to solve. Keeping up with current indirect tax laws and rules can be essential whether it is for a company or an individual. The well informed person would do well by using every available tax resource to its full potential In order to ease the financial strain of taxes, and the many questions that they bring. When having questions like the ones listed above you can contact the thousands of Experts for further information.
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