Using the legend provided, classify each of the following statements: Legend A = Tax avoidance E = Tax evasion N = Neither

a. Sue writes a $707 check for a charitable contribution on December 28, 2013, but does not mail the check to the charitable organization until January 10, 2014. She takes a deduction in 2013.

b. Sam decides not to report interest income from a bank because the amount is only $19.75.

c. Harry pays property taxes on his home in December 2013 rather than waiting until February 2014.

d. Variet switches her investments from taxable corporate bonds to tax-exempt municipal bonds.

e. Mel encourages his mother to save most of her Social Security benefits so that he will be able to claim her as a dependent.

I got A, E, N, E, A.

A, A, E, E, E.

Explanation:

Tax evasion is an illegal activity in which a person or entity deliberately avoids paying a true tax liability. Those caught evading taxes are generally subject to criminal charges and substantial penalties.

Tax avoidance is the legal usage of the tax regime in a single territory to one's own advantage to reduce the amount of tax that is payable by means that are within the law. Tax sheltering is very similar, although unlike tax avoidance tax sheltering is not necessarily legal.

Sue writes a $707 check for a charitable contribution on December 28, 2013, but does not mail the check to the charitable organization until January 10, 2014. She takes a deduction in 2013. A - Tax Evasion

Sam decides not to report interest income from a bank because the amount is only $19.75. A - Tax Evasion

Harry pays property taxes on his home in December 2013 rather than waiting until February 2014. - E - Tax Avoidance.

Variet switches her investments from taxable corporate bonds to tax-exempt municipal bonds. E - Tax Avoidance.

Mel encourages his mother to save most of her Social Security benefits so that he will be able to claim her as a dependent. E - Tax Avoidance.