Tax Evasion Differs from Tax Avoidance in the Sense That

question 59

Multiple Choice

Tax evasion differs from tax avoidance in the sense that evasion

• A)is easier
• B)can only be done through an accountant
• C)is legal
• D)is illegal
• E)is encouraged by the Internal Revenue Service

---

Definitions:

Limited Liability

A legal principle that limits an investor's loss in a business venture to the amount of capital invested, protecting personal assets from business debts and obligations.

Tax-Exempt Status

A designation that exempts specific entities or income from tax under federal or state laws.

Personal Assets

Items of value owned by an individual, including both tangible and intangible assets, such as cash, property, investments, and intellectual property.

Insolvent

The condition of being unable to pay off owed debts as they become due.