Tax Liability
The total amount of tax that an entity is legally obligated to pay to an authority as the result of the occurrence of a taxable event. Taxable events include, but are not limited to, annual income, the sale of an asset, a fiscal year-end or an inheritance. Tax liability can be calculated by applying the appropriate tax rate to the taxable event's tax base. Investopedia Says:
A tax liability is a legal claim on assets. Should an entity default on paying its taxes, the governing authority may foreclose on the delinquent account, or take out a lien or encumbrance on an asset. Related Terms:
Encumbrance
Internal Revenue Service - IRS
Liability
Tax Avoidance
Tax Base
Tax Bracket
Tax Haven
Tax Lien
Tax Rate
Tax-Efficient Fund |