Evasion of Tax

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Evasion of tax refers to illegal actions by a taxpayer or business to avoid taxes. People commit tax evasion by underreporting income or hiding income altogether from the IRS. In order to be found guilty, a person must intentionally hide income, and if found guilty, a person can face fines and imprisonment. Tax evasion is to be contrasted with tax avoidance which refers to someone legally trying to use loopholes and reductions to limit their tax liability. For more information on evasion of taxes, click here

[Last updated in July of 2021 by the Wex Definitions Team