Having just gone through the annual drudgery of filing your tax returns, you should examine your conscience and ask yourself the question: Have I optimized my tax return (tax avoidance) or have I put myself at risk (tax evasion)?

Tax avoidance is an ex ante (before the fact) situation. It is legal and is good business practice. You need a good Tax Lawyer and an experienced accountant. Both can do tax planning for you or your business, e.g., income recognition & reporting, applicable tax rates, allowable deductions & postponements, tax shields, preferential areas of business where tax breaks are given in the early years of the business, etc.

Tax evasion is an ex post (after the fact) situation. It is a crime, lands you in jail, and is not good citizenship. Wittingly or unwittingly, you have broken the law (ignorance of the law is not an acceptable excuse). You need two lawyers: a Tax Lawyer and a Trial Lawyer. Your accountant probably needs a Lawyer too, because he will be impleaded.

images from Microsoft Clipart

Tax avoidance is an ex ante (before the fact) situation. It is legal and is good business practice. You need a good Tax Lawyer (there’s one at Tax Girl) and an experienced accountant. Both can do tax planning for you or your business, e.g., income recognition & reporting, applicable tax rates, allowable deductions & postponements, tax shields, preferential areas of business where tax breaks are given in the early years of the business, etc.

Tax evasion is an ex post (after the fact) situation. It is a crime, lands you in jail, and is not good citizenship. Wittingly or unwittingly, you have broken the law (ignorance of the law is not an acceptable excuse). You need two lawyers: a Tax Lawyer and a Trial Lawyer. Your accountant probably needs a Lawyer too, because he will be impleaded.

To ensure that you will not be committing tax evasion and at the same time optimizing your tax expenses through legitimate tax avoidance, you need to do Tax Planning and you need to do this with expert advice from a Tax Lawyer and an experienced accountant.

Image from Microsoft Clipart