Ask Question
20 August, 19:02

Determine whether each scenario is an example of tax avoidance or tax evasion. Andrea keeps a record of all her business-related expenses. Daniel claims the amount of interest paid for his mortgage as a tax deduction. Christian did not report the tips he earned on his tax return.

+2
Answers (1)
  1. 20 August, 20:19
    0
    1. Tax avoidance

    2. Tax avoidance

    3. Tax evasion

    Explanation:

    Tax avoidance refers to a legal way of reducing one's tax liability through lawful deductions. Ways to reduce tax liabilities are; capitalizing on tax advantage retirement accounts, liasing with tax advisor on the legal way for tax avoidance. Tax avoidance is however legal.

    Examples of tax avoidance are;

    1. Andrea keeps a record of all her business related expenses.

    2. Daniel claims the amount of interest paid for his mortgage as tax deductions.

    Tax evasion is a deliberate attempt by a tax payer to avoid payment of tax liability. It is a fraudulent action by a tax payer to wilfully evade tax in an illegal manner. In tax evasion, income is concealed to tax authorities inorder to evade tax payment which is a criminal offence. It is to be noted that tax evasion is illegal in the eye of the law.

    Example of tax evasion is;

    3. Christian did not report the tips he earned on his tax return.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Determine whether each scenario is an example of tax avoidance or tax evasion. Andrea keeps a record of all her business-related expenses. ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers