tax avoidance

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Tax avoidance

Minimizing tax burden through legal means such as tax-free municipal bonds, tax shelters, IRA accounts, and trusts. Compare with tax evasion.

Tax Avoidance

The act or practice of taking steps to legally reduce one's tax liability. One may do this directly by taking advantage of an applicable tax credit or tax deduction. More often, however, the term refers to a person or company making trades or conducting other activities specifically to avoid taxes. For example, one may sell a stock at a loss to offset a gain on the sale of another stock. It is important to note that tax avoidance is different from tax evasion, which is the minimization of one's tax liability through illegal means, though it is generally acknowledged that the line between the two can be murky.

tax avoidance

The reduction of a tax liability by legal means. For example, high-income individuals avoid significant federal income taxes by purchasing and holding municipal bonds. Compare tax evasion.

tax avoidance

any efforts by taxpayers to arrange their financial affairs so as to avoid paying TAX by taking maximum advantage of taxation allowances and reliefs. In this way taxpayers can legally minimize their tax burden. Compare TAX EVASION.

tax avoidance

any efforts by taxpayers to arrange their financial affairs so as to avoid paying TAX by taking maximum advantage of taxation allowances and reliefs. In this way taxpayers can legally minimize their tax burden. Compare TAX EVASION.

tax avoidance

Perfectly legal and ethical strategies for reducing taxes to the lowest possible number. Contrast with tax evasion.

References in periodicals archive ?
The Wall Street Journal has reported that for years Bank of America Corp (NYSE: BAC) had helped customers avoid taxes through its US banking unit.
However, if the minority interest appears to be the result of a transfer made simply to avoid taxes, the discount will not be allowed.
Global Banking News-July 22, 2014--US regulators accuse Barclays and Deutsche Bank of helping funds avoid taxes
3 ( ANI ): Republican presidential candidate Mitt Romney's offshore investment strategy has not only allowed him to only avoid taxes, but he also continues to make money from the company that he quit more than a decade ago, a new report has revealed.
The guidance intends to stop the spread of an abusive tax avoidance transaction using split-dollar life insurance, in which the parties attempt to avoid taxes by using inappropriately high current term insurance rates, premium prepayments or other techniques to understate the value of taxable policy benefits.
"Stanley Works has the potential to become the poster child for public outrage about overseas moves to avoid taxes," says Blumenthal.
TA) had helped some of its customers avoid taxes using Swiss bank accounts.
citizens and long-term permanent residents from moving abroad to avoid taxes on U.S.
Barclays Plc (LSE: BARC) is expected to announce soon the closure of its tax-planning unit, which has been accused of helping clients avoid taxes.
In addition, the innocent spouse's tax liability is increased by the value of any property received from the other spouse, if the principal purpose of the transfer was to avoid taxes. Property transfers made within one year before the earlier of the (1) payment due date or (2) date of the first proposed deficiency notice are deemed made for tax avoidance purposes, unless the taxpayer can prove otherwise.(10) However, transfers pursuant to a divorce or separate maintenance decree are not so deemed.
According to Reuters, the head of Credit Suisse (NYSE: CS) has denied accusations that Swiss banks had been helping Germans avoid taxes in spite of a standing tax pact with Germany.
Although opportunities to permanently avoid taxes are limited, opportunities for deferring taxes are abundant.