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tax evasion Finance Definition
Illegally evading paying taxes. Tax evasion differs from tax avoidance, which is the legal avoidance of taxes. By evading taxes, taxpayers may hide income or overstate deductions or expenses. Tax evaders risk significant fines, the payment of back taxes, and potential criminal penalties, which can include jail time.
tax evasion Law Definition

n

This term is generally used to designate criminal tax fraud, in which the taxpayer intentionally and deliberately understates her income or overstates her deductions and/or credits for the purpose of underpayment of tax liability. Contrast tax avoidance, the legal minimization of tax liability by aggressive interpretation of tax law.