Question

Which of the following items is illegal under the tax law?

1) Tax avoidance
2) Tax evasion
3) Accelerating deductions
4) Deferring income
5) All of the above are legal

Answer 1

Tax evasion is the item that is illegal under the tax law, as it involves deliberately avoiding paying taxes by misrepresenting or hiding income information.

Step-by-step explanation:

Out of the options given, tax evasion is the item that is illegal under the tax law. Tax evasion refers to the deliberate and illegal act of avoiding paying taxes. It involves intentionally misrepresenting or hiding income information to reduce or eliminate tax liabilities. This is in contrast to tax avoidance, which is a legal practice of minimizing tax obligations through legitimate means.