What is the difference between tax evasion and tax avoidance, and how will the IRS determine the difference? Does the IRS differentiate between felonies and misdemeanors? What are some examples of each? Are the use of Tax Shelters, as defined by the IRS, avoidance or evasion? If you recall, "aggressive" tax positions are were you can interpret the law two different ways - another is where a decision in this area of the law has never been made and you are going to test how far you can go.