Final answer:
False. Tax avoidance refers to legal methods individuals and businesses use to minimize their tax liability by taking advantage of tax credits, deductions, and exemptions.
Step-by-step explanation:
False. Text avoidance does not refer to illegal actions to reduce one's taxes. Instead, text avoidance, also known as tax avoidance, refers to the legal methods individuals and businesses use to minimize their tax liability. These methods may include taking advantage of tax credits, deductions, and exemptions, and utilizing tax planning strategies.
For example, a taxpayer may choose to contribute to a retirement account to lower their taxable income or form a business in a location with favorable tax laws. Tax avoidance is different from tax evasion, which involves intentionally and illegally evading one's tax obligations.
Overall, tax avoidance is a legal practice that allows taxpayers to use legitimate means to reduce their tax burden.