Differentiate tax avoidance from tax evasion?

Tax avoidance is the legal practice of minimizing tax liability by taking advantage of tax incentives, deductions, and credits provided by the government. It involves using legal methods to reduce tax liability within the boundaries of the law.

Tax evasion, on the other hand, is the illegal practice of deliberately underreporting income, inflating deductions, or hiding assets to avoid paying taxes owed. It involves intentionally deceiving tax authorities and violating tax laws to evade paying taxes.

In summary, tax avoidance is legal and involves using legitimate means to reduce tax liability, while tax evasion is illegal and involves intentionally deceiving tax authorities to avoid paying taxes owed.