The issues revolve around two main areas. First is whether tax offences are a predicate crime within any particular jurisdiction. Many places around the world do not raise income by income tax, for example. And so evasion of income tax cannot be a crime. The second issue that there has long been a basic principle of international law that one country does not enforce the tax laws of another.

In recent years, however, several inter-governmental bodies have sought to create a climate where tax investigations can be conducted across borders and then, by the application of laws relating to, for example, document fraud claim that the issue is not one of tax but of a simple criminal offence.

Notwithstanding the debate on international issues, within any country, the question of whether tax crimes are a predicate offence for the purposes of money laundering laws is a question of the express provision of the counter-money laundering laws, or the interpretation of those laws by the Court. In most countries that have "all crimes" counter-money laundering laws, it is almost certain that tax crimes will fall within the catch-all provisions.

Tax offences fall on the border of what is and is not laundering in that the general principle that money a person lawfully receives cannot be laundered. However, the issue is, in fact, easy to understand. If a person who is liable to pay a 40% marginal rate of income tax receives $100 for work and fails to declare it, then $40 is money "stolen" from the Treasury. Therefore, he does not launder the $100, he launders the $40. It is the tax evaded that is laundered. One complication that makes this difficult to understand is that in order to retain the $40, he actually puts the whole $100 through the laundering process. He has to try to show that he received $100 legitimately, in order to evade payment of $40.

Another complication is that the $40 is said to have been "commingled" with the remaining $60 and it has tainted the otherwise clean money. Therefore under general principles of asset seizure as applied in many countries, anything that is purchased with the $60 may be subject to freezing or forfeiture