What is the difference between tax avoidance and tax evasion?

Tax avoidance is the legal practice of reducing or minimizing the amount of taxes a person or company owes by taking advantage of the provisions and exemptions provided in the tax code. Tax avoidance is within the confines of the law and involves reducing taxes legally without breaking any laws. Kansas residents are encouraged to take advantage of the tax loopholes available to them and to organize their finances in order to minimize the state taxes they owe. Tax evasion, on the other hand, is the illegal practice of avoiding or reducing tax obligations by refusing to pay taxes, disguising income, or reporting incorrect information on tax documents. Tax evasion is illegal in Kansas and any person or business found guilty of tax evasion can be subject to severe financial penalties, criminal prosecution, and even jail time. In essence, the difference between tax avoidance and tax evasion is that tax avoidance is legal while tax evasion is not. Tax avoidance is encouraged and accepted while tax evasion is not and is punishable by law. Therefore, it is important for Kansas residents to understand the difference between the two in order to ensure they remain compliant with commercial law in Kansas.

Related FAQs

What laws regulate mergers and acquisitions?
What laws govern the formation of business partnerships?
What legislation governs the sale of goods?
What is the legal definition of a business partnership?
What are the regulations governing the formation of companies?
What is the law of agency?
What are the different types of corporate liability?
What are the rules governing competition in the marketplace?
What is the law on corporate social responsibility?
What laws govern the issuance of securities?

What is the difference between tax avoidance and tax evasion?

Related FAQs

Related Blog Posts