Is the Difference Between Tax Avoidance and Tax Evasion?
The terms "tax avoidance" and "tax evasion" are often used interchangeably, but they are very different concepts. Basically, tax avoidance is legal, while tax evasion is not.
Businesses get into trouble with the IRS when they intentionally evade taxes. But your business can avoid paying taxes, and your tax preparer can help you do that.
What Is Tax Avoidance?
Tax avoidance is the legitimate minimizing of taxes, using methods approved by the IRS. Businesses avoid taxes by taking all legitimate deductions and by sheltering income from taxes by setting up employee retirement plans and other means, all legal and under the Internal Revenue Code or state tax codes.
