Tax Evasion v/s Tax Avoidance: What is the difference?

Tax avoidance is a method of reducing tax liability within the legal boundaries by exploiting loopholes in the tax laws. Tax Evasion refers to the illegal act of avoiding paying taxes by means of deception or concealment.

Bonus Tax Rate: How are They Taxed and Who Pays? 

The bonus comes under the category of ‘supplemental wages’ by the IRS which also includes things like severance and commission. This is where confusion sets in because the IRS confuses bonuses with severance and commission.