13:34
^
Warning
Info
LSDefine
Simple English definitions for legal terms
evasion of tax
Read a random definition: QUID
A quick definition of evasion of tax:
Term: Evasion of tax
Definition: Evasion of tax means breaking the law by not paying the taxes you owe. This happens when someone hides their income or lies about how much money they make to avoid paying taxes. It is against the law to do this on purpose, and if caught, a person can be fined or even go to jail. Tax evasion is different from tax avoidance, which is when someone tries to legally pay less taxes by using special rules.
A more thorough explanation:
Evasion of tax
Evasion of tax is when someone breaks the law by not paying the taxes they owe. This can happen when a person or business hides their income from the government or lies about how much money they make. To be found guilty of tax evasion, a person must have intentionally tried to avoid paying taxes. If someone is found guilty of tax evasion, they can be fined or even sent to jail. Tax evasion is different from tax avoidance, which is when someone uses legal ways to pay less in taxes.
Example 1: John owns a small business and doesn't report all of his income on his tax return. He is intentionally hiding his income from the government to avoid paying taxes. This is an example of tax evasion.
Example 2: Sarah uses legal tax deductions to lower her tax bill. She is not breaking the law and is using tax avoidance strategies.
The examples illustrate the difference between tax evasion and tax avoidance. In example 1, John is breaking the law by hiding his income, while in example 2, Sarah is using legal ways to pay less in taxes.