What are the differences between double tax avoidance and tax evasion?

Double tax avoidance and tax evasion are two distinct practices when it comes to international tax law in Alaska. Double tax avoidance refers to an arrangement between two countries to avoid double taxation on the same income. It is a legal agreement between two countries allowing a resident of one country to pay taxes only in their home country, thus avoiding double taxation of the same income. Tax evasion, however, is an illegal practice where someone deliberately and illegally avoids paying their taxes or pays less than they legally owe. Tax evasion can include underreporting income, claiming false deductions, and failing to file a tax return. Tax evasion is typically done to avoid taxation on income or wealth and is a criminal offense punishable by fines and even jail time. The main difference between double tax avoidance and tax evasion is that double tax avoidance is a legally established agreement, while tax evasion is a criminal activity. Double tax avoidance is beneficial for individuals who are liable to pay taxes in two or more countries because it allows them to pay taxes in their home country instead of being double-taxed for the same income. Tax evasion, however, is not beneficial and can be extremely costly if found guilty.

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