eli5: Are tax evasion and avoidance the same thing, and if not, what’s the difference?
In: Economics
Also tax avoidance for the wealthy is using deductions that are in gray areas or are otherwise aggressive.
It isn’t fraud because there can be an interpretation of the very complicated Code that would enable one to interpret something in that manner. This is especially true with novel theories in which the IRS hasn’t issued an “Opinion Letter’ which clarifies it so that it is no longer in a gray area.
What will happen is that the IRS and the tax payer (or more accurately his attorney/CPA) will negotiate and come to an agreement which is almost always less than if they had paid the full tax without taking the questionable deduction or using the gray area loophole
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