Any person or business that’s run into trouble with the IRS or had their tax return denied or audited can confirm the critical importance of tax compliance.
Overall, tax compliance involves being aware of and observing the state, federal, and international tax laws and requirements set forth by government officials and other taxing authorities. A basic example here is the annual April deadline for tax return filing. Individuals who don’t complete their tax return filing by this date are considered noncompliant. They risk leaving their tax return on the table as well as facing fines or penalties.
Businesses, on the other hand, must align their accounting, reporting, and tax filing processes with a different set of laws and regulations than those governing personal tax filing. As The Balance pointed out, in addition to paying income tax, business entities must also pay:
Any failure to observe, report, and pay taxes according to these laws can come with significant consequences for a business. This includes fines and other penalties as well as impacts to their brand reputation.
There are numerous factors that can complicate and impact tax compliance. Even something as small as overlooking a detail in tax law or inaccurately calculating taxes owed can result in noncompliance.
Additionally, as EY noted, tax legislation often changes at the state, federal, and international level. Businesses and individual consumers must adjust their tax reporting and filing according to new laws.
These challenges, as well as the consequences involved with noncompliance, are creating rising demand for professional tax accounting services. Accountants who specialize in taxation can help citizens and business owners navigate changing tax law, appropriately report and calculate the amount owed, and help ensure that taxes are paid on time.
In addition to ensuring that businesses and individuals are aware of and observe all the tax laws that apply to their situation, tax accounting professionals also have the expertise to appropriately interpret and understand these regulations. Tax professionals, including accountants and auditors, have deep expertise in current tax law and the best practices for tax planning. These professionals can help businesses and individuals maintain their tax compliance even amid changing regulations and tax reform.
Tax professionals are also well-versed in more specialized areas of taxation that could apply to companies or individuals. This includes elements like estate and gift taxation, inbound and outbound transactions within international taxation, as well as income taxation of trusts and other estates.
Due to the increasingly complex nature of tax reporting, filing, and ensuring on-time payments to taxing authorities, there will be rising demand for professionals capable of accurately handling tax compliance. The U.S. Bureau of Labor Statistics forecasts that more than 90,000 employment positions for accountants and auditors with an expertise in taxation will become available from 2018 to 2028.
To find out more about tax compliance and how a master’s in taxation from Northeastern University’s D’Amore-McKim School of Business can put you on track for this type of career, connect with one of our enrollment advisors today.