What are the boundaries between legitimate taxation planning, taxation avoidance and outright taxation evasion? It seems the lines are becoming more blurred with each passing day. The issue has been front-page news around the world over the past several months due to world government authorities successful campaigns to curb the illegal make use of of offshore banks, tax havens and employment in hope of combating widespread taxation evasion.

In the US, UK and Australia, taxation authorities are actively targeting offshore schemes and expatriates at an alarming rate. Outside of unscrupulous promoters of offshore tax havens (and their clients), the taxation -collecting arms of these governments are also targeting the millions of everybody living and working around the world who can be unknowingly committing tax evasion.

Here are some recent examples:

June 2005: In the midst of a broad crackdown on offshore taxation shelters using the Patriot Act, the IRS warned US expatriates working and studying abroad that they risk up to a $10,000 fine or 50 per cent of the value of the offshore account if they fail to report overseas bank and financial accounts.

June 2005: The New York-based Big Four International accounting and consulting giant KPMG has been the subject of an IRS investigation seeking knowledge on the firms clients that used offshore taxation shelters and bank accounts.

June 2005: Eric Bassingthwaite (an alias) operating out of Channel Islands, and Philip Egglishaw, a Geneva-based Swiss attorney, were distinct for their roles in assisting wealthy Australian attorneys, executives and celebrities (all now under criminal investigation) in illegally sheltering more than $300 million is assets offshore.

July 2005: In the UK, the HM Revenue & Customs office crackdown on tax evasion and offshore banking resulted in criminal charges for hundreds of client of offshore services.

July 2005: New EU taxation rules open up offshore accounts held in several prominent taxation havens to scrutiny by government authorities for the purpose of collecting taxes.

A word of caution: Bewarethough the taxman certainly cant catch everybody, their powers and methods are becoming increasingly sophisticated.