Jane operates a small business that generates cash sales and good profit. Jane prepares and files her income tax returns. Inland Revenue has advised Jane that her income tax return for 2020 will be audited. You are working as a tax accountant. She is worried about any potential problems she may face with her income tax return and asks you to explain the difference between tax avoidance and tax evasion. Support your answer with reference to the relevant factual situation.

Required: Outline what shortfall penalty(s) may be applicable for such behaviour. Include statutory authorities.