A tax assessment is an impartial determination of the value of an item for the purposes of assessing the tax. Tax is a tool used by governments to obtain a portion of the funds from certain types of transaction. Taxation is the primary source of revenue for governments. These funds are used to pay for the cost of government services.
There are four types of tax assessments: property, customs, income and sales. Each of these four activities are completed by the citizens of the country. These taxes are all considered transactional, as they are applied at the point when the exchange of goods or services occurs.
Property tax assessments are conducted by the recipient of the property tax income. This is usually the municipality or city that the property is located in. Property can include real estate, art, antiques and other valuable assets. The vast majority of property taxes are real estate.
Customs tax assessments are usually conduction at boarder points, airports and shipping yards. Goods being brought into the country are assessed a tax value. The amount of the tax depends on the item's class. Most countries assign sales tax to imported items to ensure that there is no tax advantage to purchasing items from another country.
Income taxes are assessed based on your reported income and annual personal income tax filing. The amount of tax you pay is based on your gross income, personal situation, investments, expenses and location. Each state has their own income tax value, which is used in addition to the federal amount.
Sales taxes are usually a flat rate, based on specific classification of items. Tax auditors check the records of businesses to ensure that the taxes are being calculated correctly and remitted to the government on a regular basis.
Tax assessments are usually carried out by trained accountants who work for the government. Every Certified Public Accountant (CPA) is required to complete at least two courses in taxation. They are familiar with all the rules and procedures that govern tax assessments.
The role of a tax auditor is to confirm that procedure is being followed and that the tax laws are being applied equally to everyone. Through a process of auditing or confirming the tax assessments and remittances, the method of tax collection is validated. Tax laws that are not applied uniformly and consistently are open to court challenges. If a tax law is found to be biased, it can be struck down by the tax court judges.