The illegal practice of not paying taxes owed by underreporting income, inflating deductions, or hiding money in unreported accounts. It differs from tax avoidance, which uses legal methods to minimize tax liability.
From Latin 'taxa' (to touch or handle, referring to assessment) and 'evadere' (to escape). Tax evasion became a major legal focus in the 20th century as income taxes became the primary government revenue source and enforcement mechanisms became more sophisticated.
Tax evasion is how they finally got Al Capone - when you can't prove someone's a gangster, you can often prove they didn't pay taxes on their gangster income! The legal irony is that criminals are technically supposed to report their illegal income on tax returns, and the IRS doesn't care where the money came from as long as they get their cut.
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