Cramer's Stop Trading: Taxes, Citi

Jim Cramer reveals the difference between tax avoidance and tax evasion.

By Jeanine Poggi , Mar 12, 2010 3:58 PM EST

NEW YORK (

) -- There is nothing wrong with avoiding paying taxes, Jim Cramer declared on his

Stop Trading!

segment on CNBC.

"The government has made it clear that it is well within your patriotic right to pay as little in taxes as legally possible," Cramer said. "I am going to take advantage of that any way I can."

The government has never suggested it is your patriotic duty to pay taxes, Cramer said; in fact, they always suggest the opposite. "Anyone who thinks it's patriotic ... doesn't understand the history or philosophy of the IRS."

Still, Cramer made it very clear: while tax avoidance is allowed, tax evasion, like moving assets to Cayman Islands, is against the law.

In the American judicial system you may be innocent until proven guilty, but in tax court you are guilty until proven innocent, Cramer said.

Or, you can always get a nice chunk of cash if you turn in someone who is evading their taxes, Cramer said.

Speaking of shady accounting, it was revealed on Friday that the

Lehman Brothers'

bankruptcy report could be a roadmap for criminal charges. Cramer says these accounting tricks should be investigated so we can avoid the same practices going forward.

Cramer said we shouldn't be going after people like

Citigroup's

CEO Vikram Pandit, who is trying to rebuild the institution, but the people who actually brought down the economy.

As the 'Stop Trading!' segment drew to a close, Cramer switched to the retail sector, and declared that the hedge funds were shorting players like

Macy's

(M) - Get Report

Urban Outfitters

(URBN) - Get Report

and

Abercrombie & Fitch

(ANF) - Get Report

because of the treacherous weather in February.