• Tax evasion is any legal method used by a taxpayer to minimize the amount of income tax due.

  • Individual taxpayers and corporations can use forms of tax avoidance to reduce their tax bills.
  • Tax credits, deductions, income exclusion and loopholes are forms of tax evasion.
  • These are legal tax credits offered to encourage certain behaviors, such as saving for retirement or buying a house.
  • Tax evasion is different from tax evasion, which is based on illegal methods such as underreporting.