tax evasion

Tax Evasion

An illegal practice whereby an individual intentionally avoids paying their true tax liability. Anyone caught evading taxes is generally subject to criminal charges and substantial penalties.

Notes:

There is a difference between tax minimization and tax evasion. All citizens have the right to reduce the amount of taxes they pay as long as it is by legal means.

See also: Tax Haven, Tax Liability, Tax Shelter

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Tax evasion

Illegal by reducing tax burden by underreporting income, overstating deductions, or using illegal tax shelters.

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tax evasion

The illegal avoidance of taxes. The intentional omission of a gain from the sale of stock in reporting income to the Internal Revenue Service is an example of tax evasion. Compare tax avoidance.