Tax evasion is the deliberate and knowing avoidance of paying federal, state and/or municipal taxes. The means adopted are not legal. Attempts to defraud the government of money may include setting up a shell company in an offshore zone or not declaring the total amount of income. As a result, tax evasion is a criminal offence. It is recognized as such worldwide. In addition toa financial cost, the penalty for tax evasion includes imprisonment. Tax evasion is not restricted to individuals or groups but may be undertaken by trusts and corporations. It may be a state or a federal matter. The IRS is responsible for discovering and managing tax evasion. They pursue any miscreants, and enforce the legislation. They also ensure the penalty for tax evasion is implemented in accordance with the severity of the crime. Tax evasion is a growing problem. Many corporations attempt to reduce their taxes not through legal tax avoidance but through illegal tax evasion. In an attempt to control it, several countries have introduced stiffer measures, reduced loop holes and offered temporary amnesty.