Difference Between Tax Avoidance and Tax Evasion

1. Pretend that you are having a conversation with a young child who is still
in grade school. You are trying to briefly explain the difference between
tax avoidance and tax evasion using words, phrases, and analogies that
the young child will easily relate to and understand. How would that
conversation go?
Firstly, let's talk about preventing and dodging traffic regulations. There are
couple of roads by vehicle across city. The first is Main Street's traffic jams with
various lights whereas the latter passes in front of a playground. The safe speed
is slightly smaller and the highway bends a little bit, but there are no signals
without crossroads. It prevents traffic signals to decide to take Park Side Drive.
The next light turns red when you take Main Street. At the bend you cut
Laundromat into the car park, ride to the back road exit. Making the left turn,
exit the car park you turn right immediately as the side road now has the green;
you proceed on Main Street, scrubbing off your journey for few seconds. Then
you are pulled over by cops and ticketed to evade a traffic signal.
State makes dodging traffic signals unlawful for various reasons linked to
inappropriate use of parking fields to put "traction" in the scheme generated by
exercises, hazards to pedestrians and other vehicles, and failure of road safety,
e.g. creating spaces between vehicles further along Main Street to allow direct
traffic from side streets and driveways.
It's the same as following a path along the playground to evade taxes.
Government wants some individuals to search for this alternate path and may
find it helpful to ease Main Street congestion. The government determines at a
certain stage that too much congestion has moved to the park highway and
intervene to restrict congestion such as one-way sections, shortened roads and
speed bumps. The tax system may be amended to decrease the exploitation of
some tax policy regulations. ("What's the difference between tax avoidance and tax evasion?",
2019)
Avoiding tax include explicitly unlawful activities not to pay due taxes, and would
apply to activities thinly veiled as legitimate and designed to conceal unlawful
actions. Instances may include failure to disclose money income and the use of
fake companies to produce receipts for proof of non-existent costs.
2. Describe at least one tax planning strategy you will consider implementing
with respect to your individual tax return soon (i.e. within approximately
one to three years). In your own words, explain how this chosen strategy
is commonly implemented by taxpayers, and, if possible, provide an
overview of how you might tailor the strategy to your specific tax situation
(please do not divulge any personal financial information in your
discussion post).
Reducing tax obligation for people annually is amongst the most significant
elements of tax planning, but it can also be a complicated method. Subsidies and
deductions are sometimes ignored when filing taxes annually, and
miscalculations or mistranslations of tax rules may result in taxpayers being