Tax Avoidance vs. Tax Evasion: What’s the Difference?

1040 form
iStock_Pali Rao_1040 form
Julian Block
Columnist
Share this content

Is there a difference between tax avoidance and tax evasion? Sure there is, but the difference is not academic.

Whereas evasion is a criminal offense, avoidance is perfectly legal, as I have repeatedly pointed out in most of the more than 100 articles that I have written for AccountingWEB.

Delve, Dear Reader, into the archive of my articles. Read them to learn more than you will ever want to know, as Garrison Keillor would say, about how to select and implement safe and sensible strategies that eliminate, reduce, or postpone the amount that goes to the IRS.

For the gold-standard justification of tax avoidance, let us go back to 1947. That was when avoidance received these often-quoted words of approval from Judge Learned Hand of the 2nd Circuit Court of Appeals in New York, who is renowned for having served longer – and perhaps with more distinction – than any other federal judge in history:

“Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich and poor; and all do right; for nobody owes any public duty to pay more than the law demands; taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.”

Please Login or Register to read the full article

To access all of the content on our site, register (it's free!) or login to your existing account.

Replies

Please login or register to join the discussion.

avatar
Apr 7th 2016 14:49

To the wife, the mistress, the book-keeper and broker ... add lawyer as we've seen with the Mossack Fonseca Panama leak papers over the last few days.

Thanks (0)