Why doesn't evry cash paid person just evade? I it's not illegal to evade.
2007-08-15 11:15:02 · 8 answers · asked by blnkfrnk45 1 in Business & Finance ➔ Taxes ➔ United States
Bostonianinmo is correct.
The "saying" concerns the difference between "tax evasion" (which is illegal) and "tax avoidance" (which is entirely legal). The distinction is often traced to a United States Supreme Court decision, which was written by Oliver Wendell Holmes, which held:
"We do not speak of evasion, because, when the law draws a line, a case is on one side of it or the other, and if on the safe side is none the worse legally that a party has availed himself to the full of what the law permits. When an act is condemned as an evasion, what is meant is that it is on the wrong side of the line indicated by the policy if not by the mere letter of the law." Bullen v Wisconsin, 240 U.S. 625 (1916).
Thus, "evasion" means criminally refusing to pay tax, while "avoidance" means legally arranging ones affairs so that a minimum of tax is legally due.
Hope this helps.
2007-08-15 18:03:14 · answer #1 · answered by Tim F 5 · 1⤊ 0⤋
Uh, correction dear, take a look at Willie Nelson, he evaded taxes to the tune, I believe it was over 7 mil. to the IRS and that's what inspired him to create his album called "The IRS Tapes" because yes - it is very illegal to evade paying your taxes. Now, as far as I know, you're allowed to not claim anything less than either 500 or 600 dollars as a 1060 independent contractor and not made pay on it. Its also true that people such as waitstaffers who earn tips are definitely required to pay taxes and claim their tips.
I might add that it is also very true that when you file for unemployment benefits, you are taxed on the actual check for federal, etc. and when you file your annual taxes you must state whether or not you "claimed" unemployment benefits because, and yes I know it stinks, but my husband b----ed and moaned about my claim because he had to pay taxes for it because we didn't have enough donations or other deductions to offset it. So that's just a taste of a few legals and illegals. I wouldn't try and slide under the wire anyway because as soon as an IRS auditor does their little stint, you or whoever will get caught anyway, it's just a matter of X.
2007-08-15 18:32:47 · answer #2 · answered by bpgagirl22 5 · 1⤊ 2⤋
It IS illegal to evade taxes. I don't know where you got that idea. Taking legitimate deductions is not tax evasion.
2007-08-15 18:31:27 · answer #3 · answered by Anonymous · 3⤊ 0⤋
Because it is also illegal to evade taxes. Either way you get into trouble, although fraud is often worse trouble.
2007-08-15 18:29:50 · answer #4 · answered by Marc G 6 · 3⤊ 0⤋
Tax evasion most certainly IS illegal! No idea where you get the idea that it isn't!
Now, tax AVOIDANCE, where you use the law to your best advantage to lower your tax bill, is perfectly legal and is highly encouraged!
2007-08-15 19:07:01 · answer #5 · answered by Bostonian In MO 7 · 3⤊ 0⤋
It is illegal to evade. It's just harder to catch.
2007-08-17 21:55:52 · answer #6 · answered by Let me steer you 7 · 0⤊ 0⤋
Both are illegal. Fraud is more likely to get you tossed in jail.
2007-08-15 21:33:00 · answer #7 · answered by Judy 7 · 0⤊ 0⤋
Lots of people in prison for evasion . . .
Where you picking up that fake info ?
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2007-08-15 19:09:49 · answer #8 · answered by kate 7 · 0⤊ 0⤋