Tax evasion is the illegal evasion of taxes by individuals, corporations, and trusts. Tax evasion often includes taxpayers deliberately misrepresenting the true state of their affairs to the tax authorities to reduce their tax liability and includes dishonest tax reporting, such as declaring less income, profits or gains than the amounts actually earned, or overstating deductions.
Tax
evasion applies to both the illegal nonpayment as well as the illegal
underpayment of taxes. Even if a taxpayer fails to submit appropriate tax
forms, the International Revenue Service (IRS) can still determine if taxes
were owed based on the information required to be sent in by third parties,
such as W-2 information from a person’s employer or 1099s. Generally, a person
is not considered to be guilty of tax evasion unless the failure to pay is
deemed intentional.
Tax evasion does not equal to tax avoidance. Tax avoidance is the use of legal means to modify an individual's financial situation in order to lower the amount of income tax owed. This can include efforts such as charitable giving to an approved entity or the investment of income into tax deferred mechanism, such as an individual retirement account (IRA). In the case of an IRA, taxes on the invested funds are not paid until the funds, and any applicable interest payments, have been withdrawn.
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| Comparison of tax avoidance and tax evasion From http://www.qwealthreport.com/tax-avoidance-is-not-tax-evasion-but-try-telling-politicians/ |
The tax evasion of multinational corporations is always a hit issue, especially after the Panama Papers. Many multinational corporations will try to gain much more money through different ways such as charitable giving to an approved entity. In my opinion, all companies are supposed to pay taxes on the profits they earn but what can we do if they move their operations or investments to low-tax offshore "tax havens." This is one of difficulties of European Union.
回覆刪除Tax evasion is an criminal offense. But some firms attempt to escape payment on tax in order to reduce their tax burden. In this post, it provide detail definition on what is tax evasion. Besides,the writer have a comparison on the tax evasion and the tax avoidance which we always confuse on. It is good that a clearly table was provided.
回覆刪除Tax evasion is a illegal act that some companies attempted to reduce tax burden in order to maximize their profits. Tax avoidance is the act that to reduce tax burden in legal way. The post compared the difference between tax evasion and tax avoidance clearly.
回覆刪除The table which provided can clearly show the differences between tax avoidance and tax evasion. Tax evasion is a common practice of many multinational corporations to reduce the tax burden. And in order to have more net profit, corporations are willing to pay a huge amount to the bank which help them to modify their financial situation. In my opinions, I think this action is unethical as the corporations have the social responsibilities to the countries which they earn income from.
回覆刪除I find the definition and clarification between tax avoidance and tax evasion is clear and useful. Before that, I used to mix this two up. But I think that these two methods of reducing the payment of tax is just a fine distinction. If ones got any misdone in the process of tax avoidance, it will become illegal action. Therefore, a big cooperation which handles a large sum of money from its stakeholders should be more aware of their tax situation.
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