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Action taken by a taxpayer to legally minimize
the amount of tax he pays, i.e., to legally avoid situations where
taxes can be levied. For example, by using alternative tax rates,
methods of computation, methods of reporting, or by refraining
from, engaging in, or timing certain activities to avoid increased
taxation. See Cross-links: TAX PUBLICATIONS,
TAX AVOIDANCE-A CLOSER LOOK,
TAX LAW under "Tax Evasion," and "Tax Fraud."
Any procedure of forethought by a taxpayer to facilitate the use of tax avoidance methods applicable to his tax situation.
Any investment, deduction, or device used to facilitate tax avoidance, e.g., monetary investment in a tax exempt pension plan, energy tax credits, tax free municipal bonds, home mortgage interest deductions, etc.. See Cross-links: FEDERAL TAX FORMS under "Form 8264," and "Form 8271."
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