Overview of Sales Tax Fraud in Chicago, Illinois
If you have been charged with sales tax fraud, contact our office and speak with a sales tax fraud attorney in Chicago. Sales tax fraud is intentionally avoiding sales tax payment by destroying, concealing, or tampering with records.
House Bill 5289 increases the minimum penalty for sales tax fraud, allows prosecutors to charge business owners with tax fraud that has taken place over a longer period of time instead of month by month, and creates the crime of sales tax evasion.
Message from Lisa Madigan
“SPRINGFIELD, IL – Assistant Majority Leader Jeff Schoenberg (D-Evanston) has advanced legislation, supported by Attorney General Lisa Madigan, to make sales tax scoff-laws easier to prosecute.
The plan toughens criminal penalties for intentionally failing to remit money collected as sales tax and allows business owners to be prosecuted for sales tax evasion when they destroy, conceal, or falsify records.
When business owners collect sales tax on purchases but then refuse to remit those amounts to the state, they steal from their customers as well as depriving all Illinois residents of tax dollars that could be used for pressing statewide priorities,” Schoenberg said.
“This legislation gives the Department of Revenue and the Attorney General new tools to bring the worst offenders to justice and deter sales tax evasion in the future.”
Investigative Efforts & Findings
Attorney General Madigan’s office recently conducted a three-year investigation of gas stations and convenience stores to determine the prevalence of sales tax evasion. The Attorney General and the Illinois Department of Revenue found over 600 establishments that may have willfully withheld sales tax from the government and concluded that changes in the tax code were needed to strengthen enforcement efforts.
This legislation is aimed at those owners who are deliberately paying the government less than the amount they know they owe and who are destroying or altering records in an attempt to conceal their crime.
Legislation Progress & Legal Implications
The legislation has now been approved by both the House and Senate. It will return to the House for a concurrence vote before proceeding to the governor for his signature.
- Gas stations file sales-tax returns each month.
- Under the law, prosecutors have to bring a separate charge for each month of misconduct , 12 counts if a station cheats each month for one year.
- That’s needlessly cumbersome.
- The charge for failing to produce books and records is only a misdemeanor.
A long-overdue fix is in the works, backed by Attorney General Lisa Madigan. It would make evasion of more than $100,000 in sales tax by any business a non-probational Class 1 felony.
Prosecutors could aggregate the entire amount of sales tax that was under-reported month-by-month. The three-year statute of limitations for sales-tax fraud would expand to five years.
Frequently Asked Questions
What is considered sales tax fraud in Chicago, Illinois?
Sales tax fraud in Chicago typically involves deliberately avoiding the payment of required sales tax by actions such as destroying, concealing, or tampering with financial records. It also includes underreporting the amount of tax collected from customers or failing to remit the collected taxes to the state.
What penalties can I face if charged with sales tax fraud in Illinois?
Penalties for sales tax fraud have been significantly increased under Illinois law. Evasion of more than $100,000 in sales tax can now be charged as a Class 1 felony, which is non-probational and carries severe consequences, including potential prison time. Prosecutors can also aggregate multiple months of fraudulent activity into a single charge, increasing the severity.
How does Illinois investigate sales tax fraud?
The Illinois Attorney General’s office, often in conjunction with the Department of Revenue, conducts thorough investigations. These can include multi-year inquiries into specific industries suspected of widespread fraud, such as gas stations and convenience stores. Investigations focus on identifying businesses that intentionally falsify or withhold tax records.
What recent legislative changes affect sales tax fraud cases?
Recent legislation allows prosecutors to bring charges over longer periods, rather than on a month-by-month basis. The statute of limitations for sales tax fraud has been extended from three to five years. This enables law enforcement to pursue cases involving systematic underreporting and strengthens the state’s ability to prosecute fraud more effectively.
Why is sales tax fraud taken so seriously by Illinois authorities?
Sales tax fraud not only deprives the state of vital public funds but also constitutes theft from consumers who paid the tax in good faith. Authorities, including the Attorney General’s office, prioritize these cases to protect public resources and maintain fair business practices across Illinois.