Six indictments announced on August 19, 2010 illustrate the continued resolve of the Illinois Department of Revenue (IDOR) to find sales tax evaders and bring them to justice. As part of an investigation started in 2008, six gas stations owners were indicted in August, each facing multiple charges of sales tax fraud. Since the investigation began in 2008, IDOR reports to have indicted 66 gas station owners and to have recovered some $13 million in unpaid sales taxes.
Illinois and especially Chicago has some of the highest sales taxes in the country. The rules governing these taxes are also some of the most complex. In addition to a base rate of 9.75%, Chicago assesses a number of additional sales taxes on items such as cigarettes, alcohol and soft drinks. Certain areas of the city, primarily downtown and the airports, also have increased taxes.
It is a general rule of government that tax evasion is never taken lightly. Taxes, after all, are the primary income stream of the government. Although the arrests made in August focus on gas station owners, IDOR frequently audits businesses to ensure they have been paying the correct amount of sales tax. Each charge of sales tax fraud, if convicted, carries a jail sentence of two to five years.
For more information on sales tax audits and other tax situations, contact the Illinois tax lawyers of Horowitz & Weinstein.