What is the difference between tax avoidance and tax evasion?

Tax avoidance and tax evasion are two different ways of dealing with paying taxes. Tax avoidance is a legal method of reducing taxes. It involves using tax laws, rules, and deductions to reduce the amount of taxes a person or business pays. Tax evasion, however, is illegal and involves deliberately not paying or underpaying taxes. It involves purposely not filing a tax return or misrepresenting income or deductions on a tax return. In Oregon, tax avoidance is not a crime and it is not ethical to attempt to evade taxes, as it is considered fraud against the government. Tax evasion is a federal crime, and it can be a serious offense. The penalties for tax evasion are harsh and include hefty fines, criminal prosecution, and jail time. Tax avoidance is a legitimate way to save money on taxes while still staying within the bounds of the law. However, one should be aware that the Internal Revenue Service (IRS) may challenge some of the more aggressive strategies. Also, tax avoidance strategies should be reviewed annually and updated if necessary, as the laws and regulations can change. Tax evasion should be avoided completely, as the consequences can be severe.

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What is the difference between tax avoidance and tax evasion?

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