Tax Evasion

AAA

DEFINITION of 'Tax Evasion'

An illegal practice where a person, organization or corporation intentionally avoids paying his/her/its true tax liability. Those caught evading taxes are generally subject to criminal charges and substantial penalties.

INVESTOPEDIA EXPLAINS 'Tax Evasion'

There is a difference between tax minimization/avoidance and tax evasion. All citizens have the right to reduce the amount of taxes they pay as long as it is by legal means.

VIDEO

RELATED TERMS
  1. Double Irish With A Dutch Sandwich

    A tax avoidance technique employed by certain large corporations, ...
  2. IRS Notice 433 - Interest and Penalty ...

    A document published by the Internal Revenue Service that outlines ...
  3. Expatriation Tax

    An expatriation tax is a tax on someone who renounces their citizenship. ...
  4. Tax Haven

    A country that offers foreign individuals and businesses little ...
  5. Tax Shelter

    A legal method of minimizing or decreasing an investor's taxable ...
  6. Retention Tax

    A mandatory tax placed on income that is earned on investments ...
Related Articles
  1. Tax Tips For The Individual Investor
    Retirement

    Tax Tips For The Individual Investor

  2. How To Report A Tax Cheat
    Taxes

    How To Report A Tax Cheat

  3. Surviving The IRS Audit
    Taxes

    Surviving The IRS Audit

  4. Pros And Cons Of Offshore Investing
    Personal Finance

    Pros And Cons Of Offshore Investing

comments powered by Disqus
Hot Definitions
  1. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
  4. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  5. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
Trading Center