Avoiding and Evading Taxes—and What is the Difference?

avoiding taxesFew people enjoy paying taxes, but some taxpayers avoid taxes, while others evade them—what’s the real difference?


The Internal Revenue Service (IRS) notes the income tax system in the US is based on voluntary compliance.  It is a volunteer action right up to the point that you do not volunteer to pay the taxes that are required of you.  Failure to file your income tax return or filing a fraudulent tax return could earn you a criminal tax charge at some point.


We talk a lot about types of tax fraud, how it occurs, and the consequences of conviction in a criminal tax matter brought by the IRS.  As noted, tax fraud is one way that people evade their taxes.  Before they took a criminal turn, the idea was to avoid paying taxes altogether.


Avoiding your tax burden is perfectly legal.  We are experienced tax attorneys.  In addition to helping individuals and corporations who are facing a civil or criminal tax investigation, we offer guidance on perfectly legal and advisable ways to minimize your tax liability and maximize your earnings or assets.


In the US, there are a number of ways that assets can be held, taxes can be paid, and deductions can be used to reduce the amount of tax you pay on a quarterly or annual basis.  Deferred tax plans are often used around retirement planning to shield savings and maximize wealth.


Tax evasion is big business

On a global scale, tax evasion is big business.  The use of offshore tax havens and other secrecy jurisdictions can skirt dangerously close to tax evasion.  In recent years, the IRS has offered programs to prompt taxpayers into compliance who were on the wrong side of the tax evasion/tax avoidance question.


While it is legal to hold money in foreign bank accounts, taxpayers and institutions must file reports like the FBAR and FATCA to ensure their wealth is reported and appropriate taxes paid.


The bottom line is that the US requires qualified citizens to pay appropriate taxes.  That doesn’t mean you should pay more than you owe—or more than you might owe if you took advantage of appropriate tax avoidance strategies.  When you are concerned about what you may pay in taxes—talk to an experienced tax attorney to learn how you can avoid taxes, without being guilty of evading them.


Skilled tax guidance in Cleveland and Chicago

Serving clients in the US and beyond, Robert J. Fedor, Esq., LLC provides experienced, strategic legal representation on tax litigation civil tax audits, and strategies to grow your wealth legally without endangering your reputation or your business. Contact us or call 800-579-0997 today.


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