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Understanding Areas of a Tax Shark

The distinction between tax avoidance and tax evasion is simple. The first is legal, while the second is illegal. Unfortunately, even in this country, many consultants do not know the difference between tax avoidance and tax evasion. The majority of the planning elements proposed by these consultants frequently come under the category of tax avoidance (which is illegal), putting clients in jeopardy and diminishing the importance of tax planning. Do you want to learn more? Visit Tax Shark.

This may be one of the main reasons why clients have lost confidence in tax planning experts, as many of them have often recommended questionable systems that explicitly fall under the category of tax evasion.

In this chapter, I provide some examples and case studies (including legal cases) of how tax evasion (often suggested by consultants claiming to be tax experts) is carried out not only in this country but throughout the world. It is true that many people dislike giving the government their hard-earned money. However, doing so in an immoral way, such as by tax avoidance, is not the solution. Tax avoidance or reduction of the tax incidence are also important aspects of good tax planning. If done correctly, this will save a significant amount of money while remaining legal. This chapter also includes some realistic explanations and case studies of tax evasion (including legal cases).

Income tax, which is now the most important source of government revenue in most countries, is a relatively recent development, owing to the fact that the idea of annual income is itself a new concept. Governments tended to tax items that were simple to quantify and, as a result, simple to calculate the liability. This is why early taxes focused on tangible objects like land and buildings, physical products, commodities, and ships, as well as intangibles like a building’s number of windows or fireplaces. Governments around the world took a rising share of their country’s national income in tax throughout the twentieth century, especially in the second half, mostly to pay for increasingly costly military efforts and a modern welfare state.