The taking of legal actions or omissions with the intent to minimize tax.
As Learned Hand once said, in Helvering v Gregory, 69 F. 2d 809 (1934):
“Any one may so arrange his affairs that his taxes shall be as low as possible. He is not bound to choose that pattern which will best pay the Treasury. There is not even a patriotic duty to increase one’s taxes.”
In some jurisdictions, also known as tax mitigation or tax planning.
In a family law judgment, the Newfoundland Court of Appeal, in 1999, Bursey v Bursey 47 RFL 4th 1, had occasion to write these words:
“Notionally, the words "avoid" and "evade" often are employed synonymously in everyday discourse. In the context of taxation, however, frequently these concepts are ascribed different connotations demarking the line between conduct which is legal and that which is not.
"It is well recognized that it is not considered untoward for one to avoid taxes by arranging one's affairs so as not to incur tax.
"On the other hand, purposely evading of taxes, known to be due and payable, connotes the taking of active steps to elude and shirk one's obligation to pay taxes which have been incurred and are due and owing.”
Compare with tax evasion and tax amnesty.