What Are the Consequences of Tax Evasion in Illinois?

 Posted on October 23, 2024 in Financial Crimes

Tax evasion is a serious offense that can lead to severe penalties including prison time and heavy fines. In some cases, a person who is suspected of evading taxes can be prosecuted under both state and federal laws. The Internal Revenue Service (IRS) may launch an investigation if a person is caught evading state taxes, while the Illinois Department of Revenue might initiate a probe if someone is caught evading federal taxes.

Understanding the consequences of tax evasion is important if you are accused of committing the crime. This article will discuss what those consequences are, as well as some defenses against a charge of tax evasion. Consult an Illinois tax evasion defense attorney for more information or with questions about your specific case.

What Is Tax Evasion?

Tax evasion is deliberately failing to pay taxes you owe the state or federal government. The IRS defines it as the failure to pay or underpayment of taxes. Tax evasion can take several forms, including:

• Underreporting income: A common form of tax evasion is reporting income as lower than it was to qualify for a lower tax bracket. 
• Claiming false tax breaks: Falsely claiming deductions and credits on a tax return is also considered tax evasion. Declaring charitable deductions you never made or business expenses you never paid, for example, can trigger an investigation.
• Failure to file: Someone who Intentionally fails to file tax returns can be charged with trying to evade taxes.
• Hiding income: Trying to hide income or assets from the government is also a form of tax evasion. For example, using offshore accounts or transferring assets to someone else’s name for the purpose of avoiding taxes is tax fraud.

What Are the Penalties for Federal Tax Evasion?

Someone who is caught avoiding federal taxes may be charged with a felony and face the following penalties:

• Up to five years in prison
• A fine of up to $100,000
• A fine of up to $500,000 if the defendant is a corporation
• Prosecution fees

Aside from criminal penalties, there are other actions the IRS can take to satisfy unpaid taxes:

• If you fail to pay the taxes owed, the IRS can withhold 15 percent of your social security benefits each month until the debt is paid.
• In some cases, the IRS can place a lien on your home if you fail to pay your taxes.
• The IRS may also seize property such as your car to satisfy the debt.

What Are the Penalties for Illinois State Tax Evasion?

The Illinois Department of Revenue (IDOR) has a schedule of fines and penalties for those who do not file tax returns or report the wrong information. Someone who intentionally files a fraudulent return, for example, may be fined 50 percent of the amount owed. Failure to file a tax return after receiving a notice of non-filing from IDOR can result in a fine of two percent of the tax due or $250, whichever is greater.

Contact a Will County, IL Tax Evasion Defense Attorney

A conviction of tax evasion can seriously affect your finances and future. At Komie and Associates, we are highly experienced in tax evasion laws at both the state and federal levels and will defend you with excellent legal representation. Schedule a free consultation with a Joliet, IL criminal defense attorney by calling 312-263-2800 today.