For the last several years, the Illinois Attorney General has repeatedly issued press releases to announce the results of yet another sales tax indictment. While at the federal level, the focus on tax enforcement seems to be primarily on offshore assets and accounts, at the state level the focus has landed mostly on sales and use tax. Gas stations have gotten most of the coverage, bringing tens of millions of dollars of lost tax revenue to the state, but in our practice representing taxpayers in connection with sales and use tax cases, we’ve seen plenty of other types of businesses be the subject of Department of Revenue investigations.
Liquor stores have been the target of investigations by the Attorney General and the Department of Revenue. Medical businesses also seem frequently to come up. This is often because while many medications are taxed in Illinois at a reduced rate (the same rate at which most food is taxed) some medications or medical products are still taxed at the higher rate imposed on ordinary purchases. Businesses operating with frequent cash transactions, restaurants for example, are also often on the radar.
In 2012 the Illinois General Assembly created a new crime in Illinois, Sales Tax Evasion. The penalties depend on the amount of taxes invaded, but any amount the offense is considered a felony and entails possible jail time. For amounts less than $500, Sales Tax Evasion is a Class 4 felony (1-3 years in prison), less than $10,000 is a Class 3 felony (2-5 years in prison), less than $100,000 is a Class 2 felony (3-7 years in prison) and more than $100,000 is a Class 1 felony (6-30 years in prison). This in addition to repaying the taxes evaded, plus interest and penalties.
CONTACT CHICAGO SALES TAX ATTORNEYS
Horowitz Law Offices represents taxpayers before the IRS, the Illinois Department of Revenue and the Chicago Board of Finance. You are welcome to contact us at (312) 787-5533 or firstname.lastname@example.org