🕷️ Crawler Inspector

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Raw Queries and Responses

1. Shard Calculation

Query:

Response:

Calculated Shard: 119 (from laksa125)

2. Crawled Status Check

Query:

curl -X POST \
  'http://laksa119.int.ahrefs:8124/' \
  -H 'Content-Type: text/plain' \
  -H 'X-ClickHouse-Database: crawler3' \
  -H 'Authorization: Basic YXBpOg==' \
  -d 'SELECT getAhrefsURLFromUnparsed(src_unparsed) AS found_url, ifNull(toUnixTimestamp(download_stamp), 0) AS crawl_time, ifNull(toUnixTimestamp(props_url_first_seen), 0) AS first_indexed_time, download_http_code AS http_code, src_unparsed AS src_unparsed, src_root_hash AS src_root_hash, history_drop_reason AS history_drop_reason, meta_title AS meta_title, meta_descriptions AS meta_descriptions, attrs_boilerpipe_text AS attrs_boilerpipe_text, attrs_markdown AS attrs_markdown, attrs_readable_markdown AS attrs_readable_markdown, meta_canonical AS meta_canonical FROM crawler3.page_info_local FINAL PREWHERE (src_root_hash, src_unparsed) IN ((getAhrefsRootHashFromUnparsed(getAhrefsUnparsedNoserviceFromURL(\'https://sodowskylaw.com/blog/tax-avoidance-vs-tax-evasion/\')), getAhrefsUnparsedNoserviceFromURL(\'https://sodowskylaw.com/blog/tax-avoidance-vs-tax-evasion/\'))) FORMAT JSONEachRow'

Response:

{"found_url":"https:\/\/sodowskylaw.com\/blog\/tax-avoidance-vs-tax-evasion\/","crawl_time":1773932792,"first_indexed_time":1741097980,"http_code":200,"src_unparsed":"com,sodowskylaw!\/blog\/tax-avoidance-vs-tax-evasion\/ s443","src_root_hash":"459508732516034919","history_drop_reason":null,"meta_title":"Tax Avoidance vs. Tax Evasion | Fairfax VA IRS Tax Lawyer | IRS Attorney","meta_descriptions":["Understanding the difference between tax avoidance vs. tax evasion can ensure that you avoid tax fraud. A Fairfax tax attorney at Sodowksy Law can help."],"attrs_boilerpipe_text":"Skip to content\nTax Avoidance vs. Tax Evasion: What’s the Difference?\nHome\n»\nTax Avoidance vs. Tax Evasion: What’s the Difference?\nAs a business owner, you are expected to file and pay your taxes each year. And the IRS knows there’s nothing wrong with trying to pay less in taxes, allowing you to use legitimate strategies to lower your tax burden. But there is a huge difference between using legal tax avoidance tactics and trying to illegally underpay. Understanding the difference between tax avoidance vs. tax evasion can ensure that you avoid committing tax fraud.\nWhat Is Tax Avoidance?\nBelieve it or not, the IRS has a \nworksheet\n that outlines what constitutes legal tax avoidance vs. tax evasion. Essentially, tax avoidance involves using legal IRS programs to reduce your tax burden. It also means keeping accurate records so as to avoid overpaying on your taxes. There are a number of folks out there who pay more money each year than they have to because they don’t keep records of their earnings or because they misunderstand IRS tax codes.\nExamples of Tax Avoidance\nFederal and state tax codes allow for deductions, credits, and income adjustments that reduce your tax burden. Strategies include:\nIncreasing your 401(k) or IRA contributions:\n Retirement savings are generally not taxed on their way into your retirement accounts (although there are limits on how much you can contribute per year). They are taxed on their way out. Before your total earnings for the pay period are calculated, the money is withheld and deposited into your retirement account. This decreases your overall tax burden.\nWork- or business-related deductions: \nWithin reason, you can make specific deductions for your job. If you work from home, you can claim your office space as a work expense. Tools required for your trade are also deductible. When tax season comes by, you will have to determine if your work deductions exceed the standard deduction. If they do, then having a good accounting of your work deductions will save you money come tax time.\nTax-smart college funds: \nIf you’re setting up a college fund for your children, you may be able to take this money out of your income before it is taxed and reduce your overall tax burden.\nHome-equity deductions: \nHomeowners can write off improvements to their primary residence and interest payments on their tax returns.\nHealth savings accounts: \nSome folks set up funds to help them pay for medical expenses. Things like retirement accounts and college funds are subtracted from your check before it is taxed.\nWhat Is Tax Evasion?\nWhen you avoid paying taxes by 1) failing to file at all, 2) hiding taxable income, or 3) fabricating deductions, the IRS can accuse you of tax evasion. In essence, the IRS will charge a taxpayer who avoids assessment or payment with tax evasion after conducting a thorough audit.\nTo prove tax evasion, the IRS must prove that you knowingly and willfully attempted to deceive the federal government. In other words, an honest mistake is not enough to charge you with tax evasion.\nIf you are trying to reduce a tax burden that you feel is either unfair or more than you can afford, knowing the difference between tax avoidance vs. tax evasion will help you ensure you don’t commit any illegal acts.\nExamples of Tax Evasion\nEssentially, if you provide any false or misleading information to the IRS or attempt to hide assets, the IRS can charge you with tax evasion, among other things:\nUnderreporting income:\n If you lie about how much income you’re earning in order to reduce your tax burden, then you’re committing tax evasion.\nFabricating deductions: \nOne popular way to evade paying your taxes is to claim deductions of expenses that don’t exist. The IRS requires honest reporting of legitimate deductions.\nFailing to file a return: \nAnother common way to avoid paying taxes is by simply failing to file a return. This is still considered tax evasion. You are expected to know that you are required to file taxes.\nUnderpaying taxes:\n You are required to both file the tax returns and to pay the tax returns.\nAdditionally, businesses have an extra set of obligations and may be charged with tax evasion if they:\nPurposely understate payroll taxes;\nNeglect to withhold payroll taxes such as FICA;\nHire an outside service to manage their payroll (which does not properly report withholdings to the IRS); or\nPay employees “under the table” to avoid payroll tax obligations.\nPunishments for tax evasion can be stiff. Fines between $250,000 and $500,000 are not uncommon, and neither are jail sentences.\nLearn More About the Differences Between Tax Avoidance vs. Tax Evasion\nIf you need to save money this year, a tax attorney can help. We can also help you\nresolve problems with the IRS\n. To learn more, talk to a\nFairfax VA tax attorney\nat\nSodowsky Law Firm, P.C.\n today.","attrs_markdown":"![](https:\/\/www.facebook.com\/tr?id=430176109538424&ev=PageView&noscript=1\/)\n\n[Skip to content](https:\/\/sodowskylaw.com\/blog\/tax-avoidance-vs-tax-evasion\/#content)\n\n[![Sodowskylaw Logo](data:image\/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHdpZHRoPSIzNjAiIGhlaWdodD0iMTIwIiB2aWV3Qm94PSIwIDAgMzYwIDEyMCI+PHJlY3Qgd2lkdGg9IjEwMCUiIGhlaWdodD0iMTAwJSIgc3R5bGU9ImZpbGw6I2NmZDRkYjtmaWxsLW9wYWNpdHk6IDAuMTsiLz48L3N2Zz4=) ![Sodowskylaw Logo](data:image\/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHdpZHRoPSIzNjAiIGhlaWdodD0iMTIwIiB2aWV3Qm94PSIwIDAgMzYwIDEyMCI+PHJlY3Qgd2lkdGg9IjEwMCUiIGhlaWdodD0iMTAwJSIgc3R5bGU9ImZpbGw6I2NmZDRkYjtmaWxsLW9wYWNpdHk6IDAuMTsiLz48L3N2Zz4=) ![Sodowskylaw Logo](data:image\/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHdpZHRoPSIzNjAiIGhlaWdodD0iMTIwIiB2aWV3Qm94PSIwIDAgMzYwIDEyMCI+PHJlY3Qgd2lkdGg9IjEwMCUiIGhlaWdodD0iMTAwJSIgc3R5bGU9ImZpbGw6I2NmZDRkYjtmaWxsLW9wYWNpdHk6IDAuMTsiLz48L3N2Zz4=)](https:\/\/sodowskylaw.com\/)\n\n- [Home](https:\/\/sodowskylaw.com\/)\n- [PRACTICE AREAS](https:\/\/sodowskylaw.com\/practice-areas\/)\n  - [IRS PROBLEM RESOLUTION](https:\/\/sodowskylaw.com\/practice-areas\/irs-attorney\/)\n    - [LIENS AND LEVIES](https:\/\/sodowskylaw.com\/practice-areas\/irs-attorney\/tax-relief-attorneys-discuss-liens-levies\/)\n      - [UNDERSTANDING IRS FORM 12277](https:\/\/sodowskylaw.com\/understanding-irs-form-12277\/)\n      - [LIEN ON YOUR HOME](https:\/\/sodowskylaw.com\/how-an-irs-defense-attorney-can-help-you-if-you-have-a-lien-on-your-home\/)\n    - [OFFERS IN COMPROMISE](https:\/\/sodowskylaw.com\/practice-areas\/irs-attorney\/offers-in-compromise\/)\n    - [INSTALLMENT AGREEMENTS](https:\/\/sodowskylaw.com\/practice-areas\/irs-attorney\/irs-installment-agreements\/)\n    - [IRS AUDITS](https:\/\/sodowskylaw.com\/practice-areas\/irs-attorney\/receive-notice-irs-audit\/)\n    - [IRS DEFENSE ATTORNEY](https:\/\/sodowskylaw.com\/practice-areas\/irs-defense-attorney-fairfax-can-help-if-you-are-being-audited\/)\n    - [UNFILED TAX RETURNS](https:\/\/sodowskylaw.com\/unfiled-tax-returns-2\/)\n    - [WAGE GARNISHMENT](https:\/\/sodowskylaw.com\/irs-wage-garnishment\/)\n    - [INNOCENT SPOUSE RELIEF](https:\/\/sodowskylaw.com\/irs-innocent-spouse-relief\/)\n    - [IRS NOTICE OF DEFICIENCY](https:\/\/sodowskylaw.com\/irs-notice-of-deficiency\/)\n    - [REPORTING SALE OF YOUR HOME ON YOUR TAX RETURN](https:\/\/sodowskylaw.com\/reporting-the-sale-of-your-home-on-your-tax-return-in-virginia\/)\n    - [BACK TAXES HELP](https:\/\/sodowskylaw.com\/blog\/virginia-tax-attorney-can-help-clients-who-owe-back-business-taxes\/)\n    - [STOP IRS LEVY](https:\/\/sodowskylaw.com\/stopping-an-irs-levy-in-virginia-tax-defense-attorney\/)\n  - [TAX ISSUES AND CONTROVERSIES](https:\/\/sodowskylaw.com\/tax-issues-and-controversies\/)\n    - [SMALL-BUSINESS TAX PENALTIES](https:\/\/sodowskylaw.com\/small-business-tax-penalties\/)\n    - [EMPLOYMENT TAX CHALLENGES](https:\/\/sodowskylaw.com\/employment-tax-challenges\/)\n    - [TAX AUDIT HELP](https:\/\/sodowskylaw.com\/how-a-fairfax-tax-attorney-can-help-you-during-a-tax-audit\/)\n    - [BUSINESS AUDITS HELP](https:\/\/sodowskylaw.com\/business-audits-attorney-help-virginia\/)\n- [ABOUT US](https:\/\/sodowskylaw.com\/aboutus\/)\n  - [ELDEN SODOWSKY](https:\/\/sodowskylaw.com\/elden-sodowsky\/)\n- [LIBRARY](https:\/\/sodowskylaw.com\/library\/)\n  - [ARTICLES](https:\/\/sodowskylaw.com\/library)\n  - [BLOG](https:\/\/sodowskylaw.com\/blog)\n  - [BOOKS](https:\/\/sodowskylaw.com\/reports\/)\n  - [FAQ’s](https:\/\/sodowskylaw.com\/faq)\n  - [RESOURCES](https:\/\/sodowskylaw.com\/resources)\n  - [SCHOLARSHIP](https:\/\/sodowskylaw.com\/sodowsky-scholarship-for-law-students\/)\n  - [VIDEOS](https:\/\/sodowskylaw.com\/video\/)\n- [TESTIMONIALS](https:\/\/sodowskylaw.com\/testimonials\/)\n- [Contact Us](https:\/\/sodowskylaw.com\/contact\/)\n- [(703) 436 -1176Schedule a consultation](tel:7034361176)\n\n# Tax Avoidance vs. Tax Evasion: What’s the Difference?\n[Home](https:\/\/sodowskylaw.com\/) » Tax Avoidance vs. Tax Evasion: What’s the Difference?\n\n![Tax Avoidance vs. Tax Evasion - IRS Tax Lawyer Fairfax VA](data:image\/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHdpZHRoPSIzMDAiIGhlaWdodD0iMjAxIiB2aWV3Qm94PSIwIDAgMzAwIDIwMSI+PHJlY3Qgd2lkdGg9IjEwMCUiIGhlaWdodD0iMTAwJSIgc3R5bGU9ImZpbGw6I2NmZDRkYjtmaWxsLW9wYWNpdHk6IDAuMTsiLz48L3N2Zz4=)As a business owner, you are expected to file and pay your taxes each year. And the IRS knows there’s nothing wrong with trying to pay less in taxes, allowing you to use legitimate strategies to lower your tax burden. But there is a huge difference between using legal tax avoidance tactics and trying to illegally underpay. Understanding the difference between tax avoidance vs. tax evasion can ensure that you avoid committing tax fraud.\n\n## What Is Tax Avoidance?\nBelieve it or not, the IRS has a [worksheet](https:\/\/apps.irs.gov\/app\/understandingTaxes\/whys\/thm01\/les03\/media\/ws_ans_thm01_les03.pdf) that outlines what constitutes legal tax avoidance vs. tax evasion. Essentially, tax avoidance involves using legal IRS programs to reduce your tax burden. It also means keeping accurate records so as to avoid overpaying on your taxes. There are a number of folks out there who pay more money each year than they have to because they don’t keep records of their earnings or because they misunderstand IRS tax codes.\n\n## Examples of Tax Avoidance\nFederal and state tax codes allow for deductions, credits, and income adjustments that reduce your tax burden. Strategies include:\n\n- **Increasing your 401(k) or IRA contributions:** Retirement savings are generally not taxed on their way into your retirement accounts (although there are limits on how much you can contribute per year). They are taxed on their way out. Before your total earnings for the pay period are calculated, the money is withheld and deposited into your retirement account. This decreases your overall tax burden.\n- **Work- or business-related deductions:** Within reason, you can make specific deductions for your job. If you work from home, you can claim your office space as a work expense. Tools required for your trade are also deductible. When tax season comes by, you will have to determine if your work deductions exceed the standard deduction. If they do, then having a good accounting of your work deductions will save you money come tax time.\n- **Tax-smart college funds:** If you’re setting up a college fund for your children, you may be able to take this money out of your income before it is taxed and reduce your overall tax burden.\n- **Home-equity deductions:** Homeowners can write off improvements to their primary residence and interest payments on their tax returns.\n- **Health savings accounts:** Some folks set up funds to help them pay for medical expenses. Things like retirement accounts and college funds are subtracted from your check before it is taxed.\n## What Is Tax Evasion?\nWhen you avoid paying taxes by 1) failing to file at all, 2) hiding taxable income, or 3) fabricating deductions, the IRS can accuse you of tax evasion. In essence, the IRS will charge a taxpayer who avoids assessment or payment with tax evasion after conducting a thorough audit.\n\nTo prove tax evasion, the IRS must prove that you knowingly and willfully attempted to deceive the federal government. In other words, an honest mistake is not enough to charge you with tax evasion.\n\nIf you are trying to reduce a tax burden that you feel is either unfair or more than you can afford, knowing the difference between tax avoidance vs. tax evasion will help you ensure you don’t commit any illegal acts.\n\n## Examples of Tax Evasion\nEssentially, if you provide any false or misleading information to the IRS or attempt to hide assets, the IRS can charge you with tax evasion, among other things:\n\n- **Underreporting income:** If you lie about how much income you’re earning in order to reduce your tax burden, then you’re committing tax evasion.\n- **Fabricating deductions:** One popular way to evade paying your taxes is to claim deductions of expenses that don’t exist. The IRS requires honest reporting of legitimate deductions.\n- **Failing to file a return:** Another common way to avoid paying taxes is by simply failing to file a return. This is still considered tax evasion. You are expected to know that you are required to file taxes.\n- **Underpaying taxes:** You are required to both file the tax returns and to pay the tax returns.\n\nAdditionally, businesses have an extra set of obligations and may be charged with tax evasion if they:\n\n- Purposely understate payroll taxes;\n- Neglect to withhold payroll taxes such as FICA;\n- Hire an outside service to manage their payroll (which does not properly report withholdings to the IRS); or\n- Pay employees “under the table” to avoid payroll tax obligations.\n\nPunishments for tax evasion can be stiff. Fines between \\$250,000 and \\$500,000 are not uncommon, and neither are jail sentences.\n\n## Learn More About the Differences Between Tax Avoidance vs. Tax Evasion\nIf you need to save money this year, a tax attorney can help. We can also help you [resolve problems with the IRS](https:\/\/sodowskylaw.com\/practice-areas\/irs-attorney). To learn more, talk to a [Fairfax VA tax attorney](https:\/\/sodowskylaw.com\/practice-areas\/irs-attorney) at [Sodowsky Law Firm, P.C.](https:\/\/sodowskylaw.com\/contact) today.\n\n###### [Sodowsky Law Firm, PC](https:\/\/www.google.com\/maps\/place\/Sodowsky+Law+Firm,+PC\/@38.860995,-77.381518,15z\/data=!4m5!3m4!1s0x0:0xfcc4d97d7f744db8!8m2!3d38.8609949!4d-77.3815185?hl=en)\n12500 Fair Lakes Cir \\#100,  \n Fairfax, VA 22033,  \n United States\n\n![SODOWSKY LAW FIRM](data:image\/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHdpZHRoPSIzNjAiIGhlaWdodD0iMTIwIiB2aWV3Qm94PSIwIDAgMzYwIDEyMCI+PHJlY3Qgd2lkdGg9IjEwMCUiIGhlaWdodD0iMTAwJSIgc3R5bGU9ImZpbGw6I2NmZDRkYjtmaWxsLW9wYWNpdHk6IDAuMTsiLz48L3N2Zz4=)\n\n*![phone](data:image\/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHdpZHRoPSI1OSIgaGVpZ2h0PSI2MCIgdmlld0JveD0iMCAwIDU5IDYwIj48cmVjdCB3aWR0aD0iMTAwJSIgaGVpZ2h0PSIxMDAlIiBzdHlsZT0iZmlsbDojY2ZkNGRiO2ZpbGwtb3BhY2l0eTogMC4xOyIvPjwvc3ZnPg==)*\n\nSCHEDULE A CONSULTATION  \n [(703) 436-1176](tel:7034361176)\n\n- [![facebook](data:image\/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHdpZHRoPSIxMiIgaGVpZ2h0PSIyMSIgdmlld0JveD0iMCAwIDEyIDIxIj48cmVjdCB3aWR0aD0iMTAwJSIgaGVpZ2h0PSIxMDAlIiBzdHlsZT0iZmlsbDojY2ZkNGRiO2ZpbGwtb3BhY2l0eTogMC4xOyIvPjwvc3ZnPg==)](https:\/\/www.facebook.com\/taxproblemsolver\/?rf=232032086813188)\n- [![youtube](data:image\/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHdpZHRoPSIyNSIgaGVpZ2h0PSIyNSIgdmlld0JveD0iMCAwIDI1IDI1Ij48cmVjdCB3aWR0aD0iMTAwJSIgaGVpZ2h0PSIxMDAlIiBzdHlsZT0iZmlsbDojY2ZkNGRiO2ZpbGwtb3BhY2l0eTogMC4xOyIvPjwvc3ZnPg==)](https:\/\/www.youtube.com\/user\/Fairfaxtaxman?feature=watch)\n\n##### QUICK LINKS\n- [Home](https:\/\/sodowskylaw.com\/)\n- [About the Firm](https:\/\/sodowskylaw.com\/aboutus\/)\n- [Privacy Policy](https:\/\/sodowskylaw.com\/privacy\/)\n- [Client Reviews](https:\/\/sodowskylaw.com\/testimonials\/)\n- [Contact](https:\/\/sodowskylaw.com\/contact\/)\n\n##### OUR TEAM\n- [Elden Sodowsky](https:\/\/sodowskylaw.com\/elden-sodowsky\/)\n\n##### QUICK LINKS\n- [Alexandria](https:\/\/sodowskylaw.com\/tax-lawyer-near-alexandria-va-2\/)\n- [Arlington](https:\/\/sodowskylaw.com\/tax-lawyer-near-arlington-va-2\/)\n- [Centreville](https:\/\/sodowskylaw.com\/tax-lawyer-near-centreville-va\/)\n- [Dale City](https:\/\/sodowskylaw.com\/tax-lawyer-near-dale-city-va\/)\n- [Reston](https:\/\/sodowskylaw.com\/tax-lawyer-near-reston-va-2\/)\n\n© Sodowsky Law Firm, PC. All Rights Reserved.\n\n[![OptimizedAttorney](data:image\/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHdpZHRoPSIxNTAiIGhlaWdodD0iNzEiIHZpZXdCb3g9IjAgMCAxNTAgNzEiPjxyZWN0IHdpZHRoPSIxMDAlIiBoZWlnaHQ9IjEwMCUiIHN0eWxlPSJmaWxsOiNjZmQ0ZGI7ZmlsbC1vcGFjaXR5OiAwLjE7Ii8+PC9zdmc+)](https:\/\/www.optimizedco.com\/)\n\n[Go to Top](https:\/\/sodowskylaw.com\/blog\/tax-avoidance-vs-tax-evasion\/)","attrs_readable_markdown":"![](https:\/\/www.facebook.com\/tr?id=430176109538424&ev=PageView&noscript=1\/)\n\n[Skip to content](https:\/\/sodowskylaw.com\/blog\/tax-avoidance-vs-tax-evasion\/#content)\n\n## Tax Avoidance vs. Tax Evasion: What’s the Difference?\n[Home](https:\/\/sodowskylaw.com\/) » Tax Avoidance vs. Tax Evasion: What’s the Difference?\n\n![Tax Avoidance vs. Tax Evasion - IRS Tax Lawyer Fairfax VA](data:image\/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHdpZHRoPSIzMDAiIGhlaWdodD0iMjAxIiB2aWV3Qm94PSIwIDAgMzAwIDIwMSI+PHJlY3Qgd2lkdGg9IjEwMCUiIGhlaWdodD0iMTAwJSIgc3R5bGU9ImZpbGw6I2NmZDRkYjtmaWxsLW9wYWNpdHk6IDAuMTsiLz48L3N2Zz4=)As a business owner, you are expected to file and pay your taxes each year. And the IRS knows there’s nothing wrong with trying to pay less in taxes, allowing you to use legitimate strategies to lower your tax burden. But there is a huge difference between using legal tax avoidance tactics and trying to illegally underpay. Understanding the difference between tax avoidance vs. tax evasion can ensure that you avoid committing tax fraud.\n\n## What Is Tax Avoidance?\nBelieve it or not, the IRS has a [worksheet](https:\/\/apps.irs.gov\/app\/understandingTaxes\/whys\/thm01\/les03\/media\/ws_ans_thm01_les03.pdf) that outlines what constitutes legal tax avoidance vs. tax evasion. Essentially, tax avoidance involves using legal IRS programs to reduce your tax burden. It also means keeping accurate records so as to avoid overpaying on your taxes. There are a number of folks out there who pay more money each year than they have to because they don’t keep records of their earnings or because they misunderstand IRS tax codes.\n\n## Examples of Tax Avoidance\nFederal and state tax codes allow for deductions, credits, and income adjustments that reduce your tax burden. Strategies include:\n\n- **Increasing your 401(k) or IRA contributions:** Retirement savings are generally not taxed on their way into your retirement accounts (although there are limits on how much you can contribute per year). They are taxed on their way out. Before your total earnings for the pay period are calculated, the money is withheld and deposited into your retirement account. This decreases your overall tax burden.\n- **Work- or business-related deductions:** Within reason, you can make specific deductions for your job. If you work from home, you can claim your office space as a work expense. Tools required for your trade are also deductible. When tax season comes by, you will have to determine if your work deductions exceed the standard deduction. If they do, then having a good accounting of your work deductions will save you money come tax time.\n- **Tax-smart college funds:** If you’re setting up a college fund for your children, you may be able to take this money out of your income before it is taxed and reduce your overall tax burden.\n- **Home-equity deductions:** Homeowners can write off improvements to their primary residence and interest payments on their tax returns.\n- **Health savings accounts:** Some folks set up funds to help them pay for medical expenses. Things like retirement accounts and college funds are subtracted from your check before it is taxed.\n## What Is Tax Evasion?\nWhen you avoid paying taxes by 1) failing to file at all, 2) hiding taxable income, or 3) fabricating deductions, the IRS can accuse you of tax evasion. In essence, the IRS will charge a taxpayer who avoids assessment or payment with tax evasion after conducting a thorough audit.\n\nTo prove tax evasion, the IRS must prove that you knowingly and willfully attempted to deceive the federal government. In other words, an honest mistake is not enough to charge you with tax evasion.\n\nIf you are trying to reduce a tax burden that you feel is either unfair or more than you can afford, knowing the difference between tax avoidance vs. tax evasion will help you ensure you don’t commit any illegal acts.\n\n## Examples of Tax Evasion\nEssentially, if you provide any false or misleading information to the IRS or attempt to hide assets, the IRS can charge you with tax evasion, among other things:\n\n- **Underreporting income:** If you lie about how much income you’re earning in order to reduce your tax burden, then you’re committing tax evasion.\n- **Fabricating deductions:** One popular way to evade paying your taxes is to claim deductions of expenses that don’t exist. The IRS requires honest reporting of legitimate deductions.\n- **Failing to file a return:** Another common way to avoid paying taxes is by simply failing to file a return. This is still considered tax evasion. You are expected to know that you are required to file taxes.\n- **Underpaying taxes:** You are required to both file the tax returns and to pay the tax returns.\n\nAdditionally, businesses have an extra set of obligations and may be charged with tax evasion if they:\n\n- Purposely understate payroll taxes;\n- Neglect to withhold payroll taxes such as FICA;\n- Hire an outside service to manage their payroll (which does not properly report withholdings to the IRS); or\n- Pay employees “under the table” to avoid payroll tax obligations.\n\nPunishments for tax evasion can be stiff. Fines between \\$250,000 and \\$500,000 are not uncommon, and neither are jail sentences.\n\n## Learn More About the Differences Between Tax Avoidance vs. Tax Evasion\nIf you need to save money this year, a tax attorney can help. We can also help you [resolve problems with the IRS](https:\/\/sodowskylaw.com\/practice-areas\/irs-attorney). To learn more, talk to a [Fairfax VA tax attorney](https:\/\/sodowskylaw.com\/practice-areas\/irs-attorney) at [Sodowsky Law Firm, P.C.](https:\/\/sodowskylaw.com\/contact) today.","meta_canonical":null}

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Meta Title	Tax Avoidance vs. Tax Evasion \| Fairfax VA IRS Tax Lawyer \| IRS Attorney
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Boilerpipe Text	Skip to content Tax Avoidance vs. Tax Evasion: What’s the Difference? Home » Tax Avoidance vs. Tax Evasion: What’s the Difference? As a business owner, you are expected to file and pay your taxes each year. And the IRS knows there’s nothing wrong with trying to pay less in taxes, allowing you to use legitimate strategies to lower your tax burden. But there is a huge difference between using legal tax avoidance tactics and trying to illegally underpay. Understanding the difference between tax avoidance vs. tax evasion can ensure that you avoid committing tax fraud. What Is Tax Avoidance? Believe it or not, the IRS has a worksheet that outlines what constitutes legal tax avoidance vs. tax evasion. Essentially, tax avoidance involves using legal IRS programs to reduce your tax burden. It also means keeping accurate records so as to avoid overpaying on your taxes. There are a number of folks out there who pay more money each year than they have to because they don’t keep records of their earnings or because they misunderstand IRS tax codes. Examples of Tax Avoidance Federal and state tax codes allow for deductions, credits, and income adjustments that reduce your tax burden. Strategies include: Increasing your 401(k) or IRA contributions: Retirement savings are generally not taxed on their way into your retirement accounts (although there are limits on how much you can contribute per year). They are taxed on their way out. Before your total earnings for the pay period are calculated, the money is withheld and deposited into your retirement account. This decreases your overall tax burden. Work- or business-related deductions: Within reason, you can make specific deductions for your job. If you work from home, you can claim your office space as a work expense. Tools required for your trade are also deductible. When tax season comes by, you will have to determine if your work deductions exceed the standard deduction. If they do, then having a good accounting of your work deductions will save you money come tax time. Tax-smart college funds: If you’re setting up a college fund for your children, you may be able to take this money out of your income before it is taxed and reduce your overall tax burden. Home-equity deductions: Homeowners can write off improvements to their primary residence and interest payments on their tax returns. Health savings accounts: Some folks set up funds to help them pay for medical expenses. Things like retirement accounts and college funds are subtracted from your check before it is taxed. What Is Tax Evasion? When you avoid paying taxes by 1) failing to file at all, 2) hiding taxable income, or 3) fabricating deductions, the IRS can accuse you of tax evasion. In essence, the IRS will charge a taxpayer who avoids assessment or payment with tax evasion after conducting a thorough audit. To prove tax evasion, the IRS must prove that you knowingly and willfully attempted to deceive the federal government. In other words, an honest mistake is not enough to charge you with tax evasion. If you are trying to reduce a tax burden that you feel is either unfair or more than you can afford, knowing the difference between tax avoidance vs. tax evasion will help you ensure you don’t commit any illegal acts. Examples of Tax Evasion Essentially, if you provide any false or misleading information to the IRS or attempt to hide assets, the IRS can charge you with tax evasion, among other things: Underreporting income: If you lie about how much income you’re earning in order to reduce your tax burden, then you’re committing tax evasion. Fabricating deductions: One popular way to evade paying your taxes is to claim deductions of expenses that don’t exist. The IRS requires honest reporting of legitimate deductions. Failing to file a return: Another common way to avoid paying taxes is by simply failing to file a return. This is still considered tax evasion. You are expected to know that you are required to file taxes. Underpaying taxes: You are required to both file the tax returns and to pay the tax returns. Additionally, businesses have an extra set of obligations and may be charged with tax evasion if they: Purposely understate payroll taxes; Neglect to withhold payroll taxes such as FICA; Hire an outside service to manage their payroll (which does not properly report withholdings to the IRS); or Pay employees “under the table” to avoid payroll tax obligations. Punishments for tax evasion can be stiff. Fines between $250,000 and $500,000 are not uncommon, and neither are jail sentences. Learn More About the Differences Between Tax Avoidance vs. Tax Evasion If you need to save money this year, a tax attorney can help. We can also help you resolve problems with the IRS . To learn more, talk to a Fairfax VA tax attorney at Sodowsky Law Firm, P.C. today.
Markdown	![](https://www.facebook.com/tr?id=430176109538424&ev=PageView&noscript=1/) [Skip to content](https://sodowskylaw.com/blog/tax-avoidance-vs-tax-evasion/#content) [![Sodowskylaw Logo](data:image/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHdpZHRoPSIzNjAiIGhlaWdodD0iMTIwIiB2aWV3Qm94PSIwIDAgMzYwIDEyMCI+PHJlY3Qgd2lkdGg9IjEwMCUiIGhlaWdodD0iMTAwJSIgc3R5bGU9ImZpbGw6I2NmZDRkYjtmaWxsLW9wYWNpdHk6IDAuMTsiLz48L3N2Zz4=) ![Sodowskylaw Logo](data:image/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHdpZHRoPSIzNjAiIGhlaWdodD0iMTIwIiB2aWV3Qm94PSIwIDAgMzYwIDEyMCI+PHJlY3Qgd2lkdGg9IjEwMCUiIGhlaWdodD0iMTAwJSIgc3R5bGU9ImZpbGw6I2NmZDRkYjtmaWxsLW9wYWNpdHk6IDAuMTsiLz48L3N2Zz4=) ![Sodowskylaw Logo](data:image/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHdpZHRoPSIzNjAiIGhlaWdodD0iMTIwIiB2aWV3Qm94PSIwIDAgMzYwIDEyMCI+PHJlY3Qgd2lkdGg9IjEwMCUiIGhlaWdodD0iMTAwJSIgc3R5bGU9ImZpbGw6I2NmZDRkYjtmaWxsLW9wYWNpdHk6IDAuMTsiLz48L3N2Zz4=)](https://sodowskylaw.com/) - [Home](https://sodowskylaw.com/) - [PRACTICE AREAS](https://sodowskylaw.com/practice-areas/) - [IRS PROBLEM RESOLUTION](https://sodowskylaw.com/practice-areas/irs-attorney/) - [LIENS AND LEVIES](https://sodowskylaw.com/practice-areas/irs-attorney/tax-relief-attorneys-discuss-liens-levies/) - [UNDERSTANDING IRS FORM 12277](https://sodowskylaw.com/understanding-irs-form-12277/) - [LIEN ON YOUR HOME](https://sodowskylaw.com/how-an-irs-defense-attorney-can-help-you-if-you-have-a-lien-on-your-home/) - [OFFERS IN COMPROMISE](https://sodowskylaw.com/practice-areas/irs-attorney/offers-in-compromise/) - [INSTALLMENT AGREEMENTS](https://sodowskylaw.com/practice-areas/irs-attorney/irs-installment-agreements/) - [IRS AUDITS](https://sodowskylaw.com/practice-areas/irs-attorney/receive-notice-irs-audit/) - [IRS DEFENSE ATTORNEY](https://sodowskylaw.com/practice-areas/irs-defense-attorney-fairfax-can-help-if-you-are-being-audited/) - [UNFILED TAX RETURNS](https://sodowskylaw.com/unfiled-tax-returns-2/) - [WAGE GARNISHMENT](https://sodowskylaw.com/irs-wage-garnishment/) - [INNOCENT SPOUSE RELIEF](https://sodowskylaw.com/irs-innocent-spouse-relief/) - [IRS NOTICE OF DEFICIENCY](https://sodowskylaw.com/irs-notice-of-deficiency/) - [REPORTING SALE OF YOUR HOME ON YOUR TAX RETURN](https://sodowskylaw.com/reporting-the-sale-of-your-home-on-your-tax-return-in-virginia/) - [BACK TAXES HELP](https://sodowskylaw.com/blog/virginia-tax-attorney-can-help-clients-who-owe-back-business-taxes/) - [STOP IRS LEVY](https://sodowskylaw.com/stopping-an-irs-levy-in-virginia-tax-defense-attorney/) - [TAX ISSUES AND CONTROVERSIES](https://sodowskylaw.com/tax-issues-and-controversies/) - [SMALL-BUSINESS TAX PENALTIES](https://sodowskylaw.com/small-business-tax-penalties/) - [EMPLOYMENT TAX CHALLENGES](https://sodowskylaw.com/employment-tax-challenges/) - [TAX AUDIT HELP](https://sodowskylaw.com/how-a-fairfax-tax-attorney-can-help-you-during-a-tax-audit/) - [BUSINESS AUDITS HELP](https://sodowskylaw.com/business-audits-attorney-help-virginia/) - [ABOUT US](https://sodowskylaw.com/aboutus/) - [ELDEN SODOWSKY](https://sodowskylaw.com/elden-sodowsky/) - [LIBRARY](https://sodowskylaw.com/library/) - [ARTICLES](https://sodowskylaw.com/library) - [BLOG](https://sodowskylaw.com/blog) - [BOOKS](https://sodowskylaw.com/reports/) - [FAQ’s](https://sodowskylaw.com/faq) - [RESOURCES](https://sodowskylaw.com/resources) - [SCHOLARSHIP](https://sodowskylaw.com/sodowsky-scholarship-for-law-students/) - [VIDEOS](https://sodowskylaw.com/video/) - [TESTIMONIALS](https://sodowskylaw.com/testimonials/) - [Contact Us](https://sodowskylaw.com/contact/) - [(703) 436 -1176Schedule a consultation](tel:7034361176) # Tax Avoidance vs. Tax Evasion: What’s the Difference? [Home](https://sodowskylaw.com/) » Tax Avoidance vs. Tax Evasion: What’s the Difference? ![Tax Avoidance vs. Tax Evasion - IRS Tax Lawyer Fairfax VA](data:image/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHdpZHRoPSIzMDAiIGhlaWdodD0iMjAxIiB2aWV3Qm94PSIwIDAgMzAwIDIwMSI+PHJlY3Qgd2lkdGg9IjEwMCUiIGhlaWdodD0iMTAwJSIgc3R5bGU9ImZpbGw6I2NmZDRkYjtmaWxsLW9wYWNpdHk6IDAuMTsiLz48L3N2Zz4=)As a business owner, you are expected to file and pay your taxes each year. And the IRS knows there’s nothing wrong with trying to pay less in taxes, allowing you to use legitimate strategies to lower your tax burden. But there is a huge difference between using legal tax avoidance tactics and trying to illegally underpay. Understanding the difference between tax avoidance vs. tax evasion can ensure that you avoid committing tax fraud. ## What Is Tax Avoidance? Believe it or not, the IRS has a [worksheet](https://apps.irs.gov/app/understandingTaxes/whys/thm01/les03/media/ws_ans_thm01_les03.pdf) that outlines what constitutes legal tax avoidance vs. tax evasion. Essentially, tax avoidance involves using legal IRS programs to reduce your tax burden. It also means keeping accurate records so as to avoid overpaying on your taxes. There are a number of folks out there who pay more money each year than they have to because they don’t keep records of their earnings or because they misunderstand IRS tax codes. ## Examples of Tax Avoidance Federal and state tax codes allow for deductions, credits, and income adjustments that reduce your tax burden. Strategies include: - Increasing your 401(k) or IRA contributions: Retirement savings are generally not taxed on their way into your retirement accounts (although there are limits on how much you can contribute per year). They are taxed on their way out. Before your total earnings for the pay period are calculated, the money is withheld and deposited into your retirement account. This decreases your overall tax burden. - Work- or business-related deductions: Within reason, you can make specific deductions for your job. If you work from home, you can claim your office space as a work expense. Tools required for your trade are also deductible. When tax season comes by, you will have to determine if your work deductions exceed the standard deduction. If they do, then having a good accounting of your work deductions will save you money come tax time. - Tax-smart college funds: If you’re setting up a college fund for your children, you may be able to take this money out of your income before it is taxed and reduce your overall tax burden. - Home-equity deductions: Homeowners can write off improvements to their primary residence and interest payments on their tax returns. - Health savings accounts: Some folks set up funds to help them pay for medical expenses. Things like retirement accounts and college funds are subtracted from your check before it is taxed. ## What Is Tax Evasion? When you avoid paying taxes by 1) failing to file at all, 2) hiding taxable income, or 3) fabricating deductions, the IRS can accuse you of tax evasion. In essence, the IRS will charge a taxpayer who avoids assessment or payment with tax evasion after conducting a thorough audit. To prove tax evasion, the IRS must prove that you knowingly and willfully attempted to deceive the federal government. In other words, an honest mistake is not enough to charge you with tax evasion. If you are trying to reduce a tax burden that you feel is either unfair or more than you can afford, knowing the difference between tax avoidance vs. tax evasion will help you ensure you don’t commit any illegal acts. ## Examples of Tax Evasion Essentially, if you provide any false or misleading information to the IRS or attempt to hide assets, the IRS can charge you with tax evasion, among other things: - Underreporting income: If you lie about how much income you’re earning in order to reduce your tax burden, then you’re committing tax evasion. - Fabricating deductions: One popular way to evade paying your taxes is to claim deductions of expenses that don’t exist. The IRS requires honest reporting of legitimate deductions. - Failing to file a return: Another common way to avoid paying taxes is by simply failing to file a return. This is still considered tax evasion. You are expected to know that you are required to file taxes. - Underpaying taxes: You are required to both file the tax returns and to pay the tax returns. Additionally, businesses have an extra set of obligations and may be charged with tax evasion if they: - Purposely understate payroll taxes; - Neglect to withhold payroll taxes such as FICA; - Hire an outside service to manage their payroll (which does not properly report withholdings to the IRS); or - Pay employees “under the table” to avoid payroll tax obligations. Punishments for tax evasion can be stiff. Fines between \$250,000 and \$500,000 are not uncommon, and neither are jail sentences. ## Learn More About the Differences Between Tax Avoidance vs. Tax Evasion If you need to save money this year, a tax attorney can help. We can also help you [resolve problems with the IRS](https://sodowskylaw.com/practice-areas/irs-attorney). To learn more, talk to a [Fairfax VA tax attorney](https://sodowskylaw.com/practice-areas/irs-attorney) at [Sodowsky Law Firm, P.C.](https://sodowskylaw.com/contact) today. ###### [Sodowsky Law Firm, PC](https://www.google.com/maps/place/Sodowsky+Law+Firm,+PC/@38.860995,-77.381518,15z/data=!4m5!3m4!1s0x0:0xfcc4d97d7f744db8!8m2!3d38.8609949!4d-77.3815185?hl=en) 12500 Fair Lakes Cir \#100, Fairfax, VA 22033, United States ![SODOWSKY LAW FIRM](data:image/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHdpZHRoPSIzNjAiIGhlaWdodD0iMTIwIiB2aWV3Qm94PSIwIDAgMzYwIDEyMCI+PHJlY3Qgd2lkdGg9IjEwMCUiIGhlaWdodD0iMTAwJSIgc3R5bGU9ImZpbGw6I2NmZDRkYjtmaWxsLW9wYWNpdHk6IDAuMTsiLz48L3N2Zz4=) ![phone](data:image/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHdpZHRoPSI1OSIgaGVpZ2h0PSI2MCIgdmlld0JveD0iMCAwIDU5IDYwIj48cmVjdCB3aWR0aD0iMTAwJSIgaGVpZ2h0PSIxMDAlIiBzdHlsZT0iZmlsbDojY2ZkNGRiO2ZpbGwtb3BhY2l0eTogMC4xOyIvPjwvc3ZnPg==) SCHEDULE A CONSULTATION [(703) 436-1176](tel:7034361176) - [![facebook](data:image/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHdpZHRoPSIxMiIgaGVpZ2h0PSIyMSIgdmlld0JveD0iMCAwIDEyIDIxIj48cmVjdCB3aWR0aD0iMTAwJSIgaGVpZ2h0PSIxMDAlIiBzdHlsZT0iZmlsbDojY2ZkNGRiO2ZpbGwtb3BhY2l0eTogMC4xOyIvPjwvc3ZnPg==)](https://www.facebook.com/taxproblemsolver/?rf=232032086813188) - [![youtube](data:image/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHdpZHRoPSIyNSIgaGVpZ2h0PSIyNSIgdmlld0JveD0iMCAwIDI1IDI1Ij48cmVjdCB3aWR0aD0iMTAwJSIgaGVpZ2h0PSIxMDAlIiBzdHlsZT0iZmlsbDojY2ZkNGRiO2ZpbGwtb3BhY2l0eTogMC4xOyIvPjwvc3ZnPg==)](https://www.youtube.com/user/Fairfaxtaxman?feature=watch) ##### QUICK LINKS - [Home](https://sodowskylaw.com/) - [About the Firm](https://sodowskylaw.com/aboutus/) - [Privacy Policy](https://sodowskylaw.com/privacy/) - [Client Reviews](https://sodowskylaw.com/testimonials/) - [Contact](https://sodowskylaw.com/contact/) ##### OUR TEAM - [Elden Sodowsky](https://sodowskylaw.com/elden-sodowsky/) ##### QUICK LINKS - [Alexandria](https://sodowskylaw.com/tax-lawyer-near-alexandria-va-2/) - [Arlington](https://sodowskylaw.com/tax-lawyer-near-arlington-va-2/) - [Centreville](https://sodowskylaw.com/tax-lawyer-near-centreville-va/) - [Dale City](https://sodowskylaw.com/tax-lawyer-near-dale-city-va/) - [Reston](https://sodowskylaw.com/tax-lawyer-near-reston-va-2/) © Sodowsky Law Firm, PC. 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Readable Markdown	![](https://www.facebook.com/tr?id=430176109538424&ev=PageView&noscript=1/) [Skip to content](https://sodowskylaw.com/blog/tax-avoidance-vs-tax-evasion/#content) ## Tax Avoidance vs. Tax Evasion: What’s the Difference? [Home](https://sodowskylaw.com/) » Tax Avoidance vs. Tax Evasion: What’s the Difference? ![Tax Avoidance vs. Tax Evasion - IRS Tax Lawyer Fairfax VA](data:image/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHdpZHRoPSIzMDAiIGhlaWdodD0iMjAxIiB2aWV3Qm94PSIwIDAgMzAwIDIwMSI+PHJlY3Qgd2lkdGg9IjEwMCUiIGhlaWdodD0iMTAwJSIgc3R5bGU9ImZpbGw6I2NmZDRkYjtmaWxsLW9wYWNpdHk6IDAuMTsiLz48L3N2Zz4=)As a business owner, you are expected to file and pay your taxes each year. And the IRS knows there’s nothing wrong with trying to pay less in taxes, allowing you to use legitimate strategies to lower your tax burden. But there is a huge difference between using legal tax avoidance tactics and trying to illegally underpay. Understanding the difference between tax avoidance vs. tax evasion can ensure that you avoid committing tax fraud. ## What Is Tax Avoidance? Believe it or not, the IRS has a [worksheet](https://apps.irs.gov/app/understandingTaxes/whys/thm01/les03/media/ws_ans_thm01_les03.pdf) that outlines what constitutes legal tax avoidance vs. tax evasion. Essentially, tax avoidance involves using legal IRS programs to reduce your tax burden. It also means keeping accurate records so as to avoid overpaying on your taxes. There are a number of folks out there who pay more money each year than they have to because they don’t keep records of their earnings or because they misunderstand IRS tax codes. ## Examples of Tax Avoidance Federal and state tax codes allow for deductions, credits, and income adjustments that reduce your tax burden. Strategies include: - Increasing your 401(k) or IRA contributions: Retirement savings are generally not taxed on their way into your retirement accounts (although there are limits on how much you can contribute per year). They are taxed on their way out. Before your total earnings for the pay period are calculated, the money is withheld and deposited into your retirement account. This decreases your overall tax burden. - Work- or business-related deductions: Within reason, you can make specific deductions for your job. If you work from home, you can claim your office space as a work expense. Tools required for your trade are also deductible. When tax season comes by, you will have to determine if your work deductions exceed the standard deduction. If they do, then having a good accounting of your work deductions will save you money come tax time. - Tax-smart college funds: If you’re setting up a college fund for your children, you may be able to take this money out of your income before it is taxed and reduce your overall tax burden. - Home-equity deductions: Homeowners can write off improvements to their primary residence and interest payments on their tax returns. - Health savings accounts: Some folks set up funds to help them pay for medical expenses. Things like retirement accounts and college funds are subtracted from your check before it is taxed. ## What Is Tax Evasion? When you avoid paying taxes by 1) failing to file at all, 2) hiding taxable income, or 3) fabricating deductions, the IRS can accuse you of tax evasion. In essence, the IRS will charge a taxpayer who avoids assessment or payment with tax evasion after conducting a thorough audit. To prove tax evasion, the IRS must prove that you knowingly and willfully attempted to deceive the federal government. In other words, an honest mistake is not enough to charge you with tax evasion. If you are trying to reduce a tax burden that you feel is either unfair or more than you can afford, knowing the difference between tax avoidance vs. tax evasion will help you ensure you don’t commit any illegal acts. ## Examples of Tax Evasion Essentially, if you provide any false or misleading information to the IRS or attempt to hide assets, the IRS can charge you with tax evasion, among other things: - Underreporting income: If you lie about how much income you’re earning in order to reduce your tax burden, then you’re committing tax evasion. - Fabricating deductions: One popular way to evade paying your taxes is to claim deductions of expenses that don’t exist. The IRS requires honest reporting of legitimate deductions. - Failing to file a return: Another common way to avoid paying taxes is by simply failing to file a return. This is still considered tax evasion. You are expected to know that you are required to file taxes. - Underpaying taxes: You are required to both file the tax returns and to pay the tax returns. Additionally, businesses have an extra set of obligations and may be charged with tax evasion if they: - Purposely understate payroll taxes; - Neglect to withhold payroll taxes such as FICA; - Hire an outside service to manage their payroll (which does not properly report withholdings to the IRS); or - Pay employees “under the table” to avoid payroll tax obligations. Punishments for tax evasion can be stiff. Fines between \$250,000 and \$500,000 are not uncommon, and neither are jail sentences. ## Learn More About the Differences Between Tax Avoidance vs. Tax Evasion If you need to save money this year, a tax attorney can help. We can also help you [resolve problems with the IRS](https://sodowskylaw.com/practice-areas/irs-attorney). To learn more, talk to a [Fairfax VA tax attorney](https://sodowskylaw.com/practice-areas/irs-attorney) at [Sodowsky Law Firm, P.C.](https://sodowskylaw.com/contact) today.
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