[XorNot]

Related but entirely different purposes. Paying taxes on illegally sourced money is basically the goal, because it makes it legal - it gives you a declared income and means future transactions look within your means.

Tax evasion conversely makes legally earned money somewhat illegal to the evader (though generally fine for anyone else to handle accidentally).

[bluGill]

Paying taxes doesn't make illegal things legal. However it hides evidence. Al Capon was got on tax evasion because exidence of that was easier to prove. Everyone knew is other crimes - but there wasn't enough evidence to convict.