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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

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.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005

tax avoidance

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

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
As a result of the decision, companies will have the opportunity to have inter-company payments respected by Massachusetts by demonstrating that the affiliated corporations are real, regardless of whether the sole purpose for the formation of such affiliates is the avoidance of taxes.
Transactions with no economic purpose or substance other than the avoidance of taxes will be disregarded.
Such a transfer shall be prima facie evidence of intent to evade taxation and the burden of proving the existence of a bona fide investment or business purpose, other than the avoidance of taxes, for such transaction shall be upon the taxpayer.