Practice Quiz

RTRP - IRS Registered Tax Return Preparer Test

Category - Fundamental Forensic Knowledge

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The difference between tax avoidance and tax evasion is:
  1. Tax avoidance is permissible by law, whereas, tax evasion is a crime
  2. Tax avoidance is punishable, whereas, tax evasion is allowed
  3. Tax avoidance is manipulation of laws, whereas, tax evasion is lawful
  4. Tax avoidance at a larger level refers to tax evasion
Explanation
Answer: A - It is important for practitioners to be knowledgeable about what constitutes as tax avoidance and tax evasion. Tax avoidance is permissible by law, whereas, tax evasion is a crime as per the court of law.
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