The 'difference' is one is illegal. If you have $1M in a Swiss bank account earning capital gains, and don't declare it to the IRS - that's 'tax evasion'. If

The 'difference' is one is illegal. If you have $1M in a Swiss bank account earning capital gains, and don't declare it to the IRS - that's 'tax evasion'. If you have a company in Switzerland generating revenue, and decide not to bring back your profits to America to get hit with another tax, and just let it sit in Switzlerland - that's a 'tax avoidance' strategy. 'Tax evasion' = illegal. 'Tax avoidance' = doing everything you can within the boundaries of the law to not pay taxes. There are some wierd loopholes due to the way taxation works across borders.