Definition
Abatement in general refers to a reduction, lessening, or termination of something. In specific contexts, it carries particular meanings:
Legal Context
- Abatement in Law: In legal proceedings, abatement can refer to either the termination or a temporary suspension of a lawsuit. This could occur due to a variety of reasons such as the death of a party involved, procedural errors, or settlements reached before the final judgment.
Taxation Context
- Abatement of Taxes: In taxation, an abatement refers to a rebate, reduction, or decrease in the amount of taxes owed. This can occur via official government measures or through appeals made by taxpayers seeking relief on taxes due to specific conditions like property damage or environmental conservation.
Examples
- Lawsuit Abatement: A case may be abated if the plaintiff fails to serve the defendant properly or if jurisdictional issues are present.
- Tax Abatement: A city might offer a tax abatement to encourage businesses to set up in a particular area, reducing their local property taxes for a set period.
Frequently Asked Questions (FAQs)
What causes a lawsuit to abate?
Lawsuits can abate due to several reasons including the death of a party involved, lack of proper service of process, jurisdictional issues, procedural errors, or settlement between the parties before a judgment.
Are tax abatements permanent?
No, tax abatements are typically temporary measures. They are often used to stimulate economic activity, provide relief for certain conditions like natural disasters, or encourage specific behaviors like environmental conservation.
Can an abatement be reversed?
Yes, in certain situations, an abatement can be reversed. For example, a tax abatement agreement might be voided if the recipient fails to meet specific conditions set by the granting authority.
Related Terms
- Tax Rebate: A refund on taxes when the tax liability is less than the taxes paid.
- Tax Reduction: The lowering of the rate at which taxes are paid, which reduces the overall tax bill.
- Suspension of Proceeding: A temporary halt in legal proceedings.
Online Resources
Suggested Books for Further Studies
- “Principles of Taxation for Business and Investment Planning” by Sally M. Jones and Shelley Rhoades-Catanach
- “Tax Savvy for Small Business” by Frederick W. Daily
- “Civil Litigation Handbook” by Susan Cunningham-Hill and Karen Elder
Fundamentals of Abatement: Business Law and Taxation Basics Quiz
### What is an abatement in the context of taxation?
- [ ] Increased tax rates
- [ ] Permanent tax exemption
- [x] Reduction or rebate of taxes owed
- [ ] Implementation of new taxes
> **Explanation:** An abatement in taxation refers to the reduction or rebate of taxes owed by an individual or entity.
### What might trigger a legal abatement?
- [x] Procedural errors in filing
- [ ] Increase in case severity
- [ ] Ongoing trial progress
- [ ] Agreement on penalties
> **Explanation:** Procedural errors, such as incorrect filing or lack of jurisdiction, can trigger the abatement of a lawsuit.
### Is a tax abatement always permanent?
- [ ] Yes, it is a permanent reduction.
- [x] No, it is typically temporary.
- [ ] Yes, it lasts for the lifetime.
- [ ] No, it varies per state.
> **Explanation:** Tax abatements are generally temporary and are employed for various strategic economic or social reasons.
### How can an abatement in legal terms be reversed?
- [ ] Just by the claimant’s request
- [ ] Automatically after a certain period
- [x] By addressing the cause of abatement
- [ ] Through municipal approval
> **Explanation:** An abatement in legal context can often be reversed by addressing and correcting the reasons that led to the abatement, such as procedural errors.
### What can a business gain from a tax abatement?
- [ ] Increase in employee wages
- [x] Reduction in property taxes
- [ ] Permanent tax exemption
- [ ] Additional subsidies
> **Explanation:** Tax abatements can provide businesses with reductions in property taxes, which can incentivize business establishment or growth.
### What provides the authority for tax abatements?
- [x] Government policies
- [ ] Business compliance
- [ ] Community leaders' agreement
- [ ] Judicial reviews
> **Explanation:** Tax abatements are authorized by specific government policies aimed at economic stimulation or relief.
### When is a lawsuit typically abated?
- [ ] During jury selection
- [ ] Post verdict
- [ ] During judge’s ruling
- [x] Pretrial or early in proceedings
> **Explanation:** Lawsuits can be abated typically early in proceedings when errors or jurisdictional issues arise.
### Which is NOT a reason for a lawsuit's abatement?
- [ ] Plaintiff's death
- [ ] Procedural flaws
- [ ] Settlement agreement
- [x] Heightened offence
> **Explanation:** Abatement does not occur due to the increased severity of an offense but rather from procedural, jurisdictional, or resolution grounds.
### Can abated taxes be collected later?
- [x] Yes, if abatement conditions are violated
- [ ] No, never
- [ ] Only post plea
- [ ] If primary abatement exceeds 20 years
> **Explanation:** Abated taxes can be reclaimed if the conditions under which the abatement was granted are violated.
### What type of abatement encourages business growth in certain areas?
- [ ] Permanent tax exemption
- [ ] Increased funding
- [x] Property tax reduction/abatement
- [ ] Employee subsidies
> **Explanation:** Property tax reductions or abatements are used frequently to encourage business growth and investment in specific areas.
Thank you for learning about abatement in business law and taxation.
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