Tax evasion means avoiding to pay your business taxes. It is an illegal activity therefore against the law. Those caught evading taxes are subject to criminal charges and substantial penalties and if proven guilty beyond a reasonable doubt, the tax evader will serve the crime. While tax evasion is illegal, tax avoidance includes finding legal ways to reduce the taxpayer’s obligation. Once the business owner files tax through the W2, and if the figure does not match his right and lawful income, then he will be investigated and castigated for avoiding taxes.
According to the law, the penalties include jail time of 5 years, a fine depending on a particular country how much the evader pays including the cost of prosecution. If failure to pay tax is due to financial situation, the business operator’s financial situation will be examined to get the information if he is not telling lies, but if the non-payment was the result of committing fraud or the concealment of reportable income, then he will be subjected for investigation. Tax avoidance is legal; tax evasion is criminal: The following are the features of tax avoidance: 1. Deliberately underreporting or omitting income 2. Keeping two sets of books and making false or overstated deductions on a return 3. Claiming personal expenses as business expenses 4. Hiding or transferring assets or income. Paying taxes is done once a year, therefore, there are responsible months to save money for tax payments. It is better to be safe than sorry. Also, it will be better to set aside money intended for tax payments.
According to the law, the penalties include jail time of 5 years, a fine depending on a particular country how much the evader pays including the cost of prosecution. If failure to pay tax is due to financial situation, the business operator’s financial situation will be examined to get the information if he is not telling lies, but if the non-payment was the result of committing fraud or the concealment of reportable income, then he will be subjected for investigation. Tax avoidance is legal; tax evasion is criminal: The following are the features of tax avoidance: 1. Deliberately underreporting or omitting income 2. Keeping two sets of books and making false or overstated deductions on a return 3. Claiming personal expenses as business expenses 4. Hiding or transferring assets or income. Paying taxes is done once a year, therefore, there are responsible months to save money for tax payments. It is better to be safe than sorry. Also, it will be better to set aside money intended for tax payments.
