The objective of this paper is to use analysis to present the issue of tax evasion that is part of the shadow economy. Based on the classification of tax evasion, we focus on deliberate illegal tax evasion, particularly in terms of its culpability. With regard to primary sources of information, we rely in part on legal regulations of the Czech Republic and in part on the Reports on the Activities of the Financial Administration of the Czech Republic and of the Customs Administration of the Czech Republic for the period of 2009 to 2013, including our own practical experience. Tax evasion/avoidance results in annual reduction of public revenue in the amount of EUR 1 trillion in the European Union, with tens of billions of Czech crowns in the Czech Republic. The situation is so alarming that even European institutions have been greatly focusing on the issue for several years now, proposing many measures aimed at reducing tax evasion and avoidance.