Tax Evasion
Tax evasion is the illegal act of not paying taxes owed to the government. This typically involves underreporting income, inflating deductions, or hiding money in offshore accounts. Unlike legal tax avoidance, which uses permissible methods to minimize tax liability, tax evasion intentionally violates tax laws. It can lead to severe penalties, including fines and imprisonment. Essentially, it’s a fraudulent attempt to avoid paying a fair share of taxes, undermining the financial system that funds public services.
Additional Insights
-
Tax evasion is the illegal act of intentionally avoiding paying taxes owed to the government. This can involve underreporting income, inflating deductions, or hiding money in offshore accounts. Unlike tax avoidance, which uses legal methods to minimize tax liabilities, tax evasion is against the law and can lead to severe penalties, including fines and imprisonment. Governments actively pursue individuals and businesses suspected of tax evasion to ensure fairness in the tax system and maintain public trust. It undermines the funding for essential services and infrastructure that benefit society as a whole.