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Tax
evasion is using illegal means to avoid paying taxes. Typically, tax evasion schemes involve an
individual or corporation misrepresenting their income to the Internal Revenue Service.
TAX AVOIDANCE Tax avoidance is basically finding the loophole that exempts you from
paying taxes and it is not strictly illegal.Tax avoidance is the use of legal methods to minimize
the amount of income tax owed by an individual or a business. This is generally accomplished
by claiming as many deductions and credits as are allowable
Tax Avoidance and Tax Evasion both are meant to reduce the tax liability ultimately, but what
makes the difference is that the former is justified in the eyes of law as it does not make any
offence or breaks any law. However it is biased as the honest tax payers are not fools, but they
can also make arrangements for postponing unnecessary tax. If we talk about the latter, it is
completely unjustified because it is a fraudulent activity, because it involves the acts which are
forbidden by law and hence it is punishable.