Tax evasion

Tax evasion is the deliberate illegal concealment or nonpayment of taxes owed to a government. It differs from lawful tax avoidance, which uses permitted ways to reduce tax liability.

Tax fraud: Intentional deception involving taxes to obtain an unlawful financial benefit or avoid a tax obligation. False records and deceptive claims are common means of evading taxes.
Tax avoidance: The lawful reduction of tax liability through choices permitted by tax law. Its legality distinguishes permitted tax planning from deliberate evasion.
Offshore tax evasion: Tax evasion involving concealed assets, income, or ownership held across national borders. Foreign accounts and opaque ownership can hide taxable wealth from authorities.
Tax penalty: A financial sanction imposed for violating tax rules or failing to meet tax obligations. Penalties add costs beyond the tax originally withheld or unpaid.
Tax return: A document reporting income, deductions, credits, and tax liability to a tax authority. False or omitted entries on returns can conceal taxable income.
Tax avoidance and evasion: The distinction between lawful tax reduction and illegal concealment or nonpayment. The boundary clarifies why low tax payments alone do not prove evasion.
Tax evasion in the United States: The criminal and civil treatment of deliberate tax noncompliance under United States law. U.S. law provides a specific framework for investigating and prosecuting evasion.
Tax prosecution: Criminal proceedings brought against a person or organization for tax-related offenses. Serious, deliberate evasion can lead to criminal charges.
Tax audit: An examination of a taxpayer’s records and returns by a tax authority. Audits can uncover discrepancies that indicate deliberate evasion.
Tax delinquency: Failure to pay taxes by their due date, which may occur without deliberate concealment. Overdue payment is not necessarily intentional evasion.

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