Which term refers to misreporting income to avoid taxes?

• A. Tax Evasion
• B. Underground Economy
• C. Public Health Care
• D. Canada Health Act

Answer: (A)

Misreporting income to avoid paying taxes is illegal and is called tax evasion. It involves deliberate actions like underreporting earnings, inflating deductions, or hiding income to reduce tax owed. The broader idea of the underground economy covers all activity not reported to the government, which can include tax evasion, but it’s a wider concept about unreported economic activity rather than the specific act of misreporting to evade taxes. The other options aren’t related to taxes or income reporting—public health care and the Canada Health Act deal with healthcare systems, not tax compliance.