This article contrasts tax evasion, tax avoidance, tax resistance and tax mitigation.

Tax evasion is the general term for efforts by individuals, Firm can have several meanings: Firm - a loose legal term for a company. Firm - an economic term, used to describe a collection of individuals grouped together for economic gain. Popularised in Ronald Coases The Nature of the Firm (1937). Firm - an English slang phrase for a criminal gang. This... firms, The term trust has several meanings: In sociology, trust is willing acceptance of one persons power to affect another. It is discussed more formally in the articles on social capital, profession and authority. There is much dispute on whether degrees of trust can be measured, or whether it simply... trusts and other entities to evade the payment of A tax is an involuntary fee paid by individuals or businesses to a government. Taxes may be paid in cash or kind (although payments in kind may not always be allowed or classified as taxes in all systems). The means of taxation, and the uses to which the funds raised... taxes by breaking the law. Tax evasion usually entails taxpayers deliberately misrepresenting or concealing the true state of their affairs to the tax authorities to reduce their tax liability, and includes, in particular, dishonest tax reporting (such as underdeclaring income, profits or gains; or overstating deductions).

By contrast tax avoidance is the legal exploitation of the tax regime to one's own advantage, to attempt to reduce the amount of tax that is payable by means that are within the law whilst making a full disclosure of the material information to the tax authorities.

Tax avoidance may be considered as either the amoral dodging of one's duties to society or the right of every citizen to find all the legal ways to avoid paying too much tax. Tax evasion, on the other hand, is a for other uses please see Crime (disambiguation) A crime is an act that violates a political or moral law. According to Western jurisprudence, there must be a simultaneous concurrence of both actus reus (guilty action) and mens rea (guilty mind) for a crime to have been committed; except in crimes... crime in almost all countries and subjects the guilty party to A fine is money paid as a financial punishment for the commission of minor crimes or as the settlement of a claim. A synonym, typically used in civil law actions, is mulct. Common examples of fines are monies paid for violations of traffic laws. Currently in English law relatively small... fines or even A prison is a place in which people are confined and deprived of a range of liberties. Prisons conventionally are institutions authorised by governments and forming part of a countrys criminal justice system, or as facilities for holding prisoners of war. A prison system is the organizational arrangement of... imprisonment. Swiss redirects here; for other uses of that term, see Swiss (disambiguation) The Swiss Confederation or Switzerland is a landlocked federal state in Europe, with neighbours Germany, France, Italy, Austria and Liechtenstein. The country has a strong tradition of political and military neutrality, but also of international co-operation, as... Switzerland is one notable exception: Tax fraud (forging documents, for example) is considered a crime, tax evasion (like underdeclaring assets) is not.

Some tax evaders see their efforts to evade taxation as based upon novel legal theories: these individuals and groups are sometimes called tax protesters. U.S. tax protesters are an example of this kind of approach to tax evasion that has generally ended in failure for those making such claims.

Tax resisters refuse to pay the tax for conscientious reasons (because they do not want to support the government or some of its activities), sometimes breaking the law to do so. Some donate their unpaid taxes to charity, while others (at least in the US) take creative "deductions" such as not paying a percentage of tax equal to the defense budget. In either case, they typically do not take the position that the tax laws are themselves illegal or do not apply to them (as tax protesters do) and they are more concerned with not paying for what they oppose than they are motivated by the desire to keep more of their money (as tax evaders typically are). Some have suggested the term tax avoision for people who adopt the techniques of tax avoidance in the service of tax resistance, thereby doing tax resistance legally.

In the UK, there is no general anti-avoidance rule (GAAR), but certain provisions of the tax legislation (known as anti-avoidance provisions) apply to prevent tax avoidance where the main object (or purpose), or one of the main objects (or purposes), of a transaction is to enable tax advantages to be obtained. Judicial doctrines, relying on a purposive construction of tax legislation, are being evolved to prevent tax avoidance involving circular, self-cancelling transactions (IRC v. Ramsey), or where steps with no commercial purpose other than the avoidance of tax are inserted into a transaction (Furniss v. Dawson). Controversially, in the 2004 Budget generally refers to a list of all planned expenses. A budget is an important concept in microeconomics, which uses a budget line to illustrate the trade_offs between two or more goods. A personal budget provides a way to manage your expenses and plan out how you will spend your... Budget, it was announced that 'promoters' and users of certain tax avoidance schemes would be required to disclose details of the schemes to the In the UK, the Inland Revenue is a department of the British Government responsible for the collection of direct taxation, including income tax, national insurance contributions, capital gains tax, inheritance tax, petroleum revenue tax, corporation tax and stamp duty. More recently, the Inland Revenue have also administered the Tax Credits... Inland Revenue.

The UK authorities use the term tax mitigation to refer to acceptable tax planning, minimising tax liabilities in ways expressly endorsed by Parliament. As set out above, on this view tax avoidance flouts the spirit of the law while following the letter and is therefore thought by some to be unacceptable, albeit not criminal in the way that evasion is. Upholding a difference between mitigation and avoidance relies on a purposive reading of legislation, and commentators disagree as to the extent to which this is permissible.

Quotations

In the words of Lord Tomlin, in the UK This article is part of the series Politics of the United Kingdom Parliament Crown House of Lords    Lord Chancellor House of Commons    Speaker Prime Minister Cabinet Government Departments Scottish Parliament    Scottish Executive National Assembly for Wales    Welsh Assembly... House of Lords case, IRC v. Duke of Westminster (1936) 19 TC 490, [1936] AC 1:

Every man is entitled if he can to order his affairs so as that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to secure this result, then, however unappreciative the Commissioners of Inland Revenue or his fellow taxpayers may be of his ingenuity, he cannot be compelled to pay an increased tax.

And Lord Clyde said, in Ayrshire Pullman Motor Services and Ritchie v. IRC (1929) 14 TC 754:

No man in this country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his stores.

According to Denis Winston Healey, Baron Healey, PC (born 30 August 1917), is a British Labour politician, regarded by many as the best Prime Minister we never had. He was born in Keighley, Yorkshire. His middle name of Winston was given to him in honour of Winston Churchill. Healey was educated at... Denis Healey, former UK The Right Honourable Gordon Brown, PC, MP, current Chancellor of the Exchequer The Chancellor of the Exchequer is the ancient title held by the British cabinet minister whose responsibilities are akin to the posts of Minister for Finance or Secretary of the Treasury in other jurisdictions. The third oldest major... Chancellor of the Exchequer:

The difference between tax avoidance and tax evasion is the thickness of a prison wall.

The Supreme Court Building, Washington, D.C. The Supreme Court Building, Washington, D.C., (large image) The Supreme Court of the United States, located in Washington, D.C., is the highest court (see supreme court) in the United States; that is, it has ultimate judicial authority within the United States... United States Supreme Court Justice References Biographical Directory of the United States Congress (http://bioguide.congress.gov/scripts/biodisplay.pl?index=S001080) Categories: People stubs | U.S. Supreme Court justices | United States Senators | Members of the U.S. House of Representatives | 1862 births | 1942 deaths ... George Sutherland, Gregory v. Helvering (1934-5) 293 U.S. 465,460:

The legal right of a taxpayer to decrease the amount of what otherwise would be his taxes, or altogether avoid them, by means which the law permits, cannot be doubted.