While tax avoidance, the minimization of tax by careful reading of tax rules, has traditionally been regarded as legal and legitimate, the issue of tax avoidance schemes came into public debate (for example in the UK and Australia) during the latter part of the 20th century. Consequently, some such schemes are considered unacceptable, and may not remove the liability to pay. In Australia, tax avoidance schemes include the bottom of the harbour schemes of the 1970s, which sought to place the liability in an entity that was unable to pay. Some writers distinguish between tax avoidance and tax minimization or mitigation; the latter being legally effective in minimizing liability.
tax avoidance - Investment & Finance Definition
Legally lessening the amount of taxes that a person pays. Tax avoidance strategies include making charitable deductions, investing in tax-exempt municipal bonds, and making a variety of retirement-related investments such as contributions to Individual Retirement Accounts (within income limits), salary reduction plans, or 401(k) plans. Using illegal methods to avoid paying taxes is called tax evasion.
tax avoidance - Legal Definition