• Our Attorneys
    • Alana Yakovlev
    • Daniel Bibb
    • Ryan Blanch
    • Sumeet Sondhi
  • Tax Evasion
    • Concealment Schemes
      • Concealment with Cash
      • Corporate Concealment
      • Disguised Ownership
      • IRA Concealment
      • Offshore Concealment
      • Trust Concealment
    • Evasion by filing a False Tax Return
    • Evasion of Payment
    • Failure to File
    • Obstruction of the IRS
      • Creating a tax evasion scheme
      • Harrassing and Intimidating the IRS
      • Impeding an IRS investigation in order to avoid taxes
      • Using the IRS to Harass a Third Party
    • Penalties and Prosecution
    • Tax Avoidance
      • Employer Withholding Tax Evasion
      • Failure to file an FBAR
    • Tax Evasion and Defenses
    • The Law and Prosecution
    • The Non-Filer Program
    • Third Party Liability for Tax Evasion
      • Preparing a false or fraudulent tax return on behalf of another
      • Promotion of Tax Fraud
    • Totals and Current News
      • Pedro Espada, Despite Last-Ditch Attack on Judge, Convicted of Embezzlement, Tax Evasion
  • Fraudulent Practices
    • Bankruptcy Fraud
      • Evasion through Bankruptcy Fraud
    • Filing False Business Deductions
    • Foreign Accounts
    • Identity Theft
    • Illegal Income
      • Tax Evasion and Criminal Liability
    • IRS Operational Priorities: Counterterrorism Financing
    • Misrepresentation of Workforce
    • Sales Tax Evasion
    • Structuring
    • Tax Settlement Scams
    • The IRS’ ‘Dirty Dozen’
    • Transferring assets
  • IRS Summons
  • Related Crimes
    • Recent Cases
      • 10th Circuit makes it harder to pay defense attorneys in tax fraud cases
      • 2nd Circuit decision provides slight hope for defendants accused of conspiracy to evade taxes
      • 5th Circuit rules that statute of limitations begins to run as late as the last act of tax evasion
      • 5th Circuit ruling supports expansive view of illegal income for sentencing enhancement
      • 6th Circuit limits the use of illegal income sentencing enhancement for tax evasion
      • 9th Circuit expands the applicability of the sophisticated means sentencing enhancement
  • Staff
    • Emel McDowell
  • Tax Crime Defenses
    • Absence of a Deficiency
    • Amendment of Return
    • Cash Hoard Defense
    • Fatal Variance Defense
    • Selective Prosecution
    • Tax Defenses that Rarely Work
    • The Inability to Pay Defense
    • The Mistake of Law
    • The Third Party Defense
    • Willfulness
  • Tax Crime Sentencing
    • Adjustments
    • Criminal History Category
    • Offense Level
  • Tax Fraud Generally
    • Prosecuting Tax Fraud Cases
    • Recent Cases in the News

646-808-3345

  • About Us
  • Recent Tax Cases
    • Federal Cases
    • 2nd Circuit
    • 5th Circuit
    • 5th Circuit
    • 6th Circuit
    • 9th Circuit
  • IRS Subpoenas
  • Case Results
  • BLF in the News
  • Contact Us
     
This jQuery slider was created with the free EasyRotator for WordPress plugin from DWUser.com.

OK
  • The IRS’ ‘Dirty Dozen’
  • Third Party Liability for Tax Evasion
  • Failure to File
  • Filing False Business Deductions
  • Promotion of Tax Fraud
  • Identity Theft
  • Structuring
  • Creating a tax evasion scheme
  • Impeding an IRS investigation in order to avoid taxes


Sales Tax Evasion


Sales tax evasion is the illegal evasion of the payment, reporting or assessment of state or local sales tax.  Unlike most taxes, sales tax is set by each state individually.  Local governments may also set a sales tax.

In New York City for example, there is an 8.875 percent sales tax. Four percent is levied by the state and all counties have a default three percent tax rate. In New York City, the sales tax is an additional 1.875 percent, with 0.375 percent going to the MTA.  Because the sales tax is a state and local tax, the prosecution on charged of sales tax evasion is usually handled by the state.  Although sales tax evasion is a fairly simple crime to commit, it is still taken seriously by state governments.

Types of Sales Tax Evasion

Usually, you’ll find sales tax evasion activities coming from a retailer or seller.  They accomplish this by skimming proceeds from sales or underreporting the sales.  Sellers might also make sales off out-of-state transactions so they can avoid reporting the proceeds from these sales.

Sometimes, the purchaser can also commit sales tax evasion.  The most common examples of this is when you purchase items out-of-state or through the Internet.

Currently, most states require taxpayers to report any payments for goods purchased out of state.  Unlike in most cases of sales tax evasion, the burden is on the buyer to report what they owe.

Buyers are also required to report sales tax on items purchased abroad.  These purchases are much harder to falsify since records from the U.S. customs declarations are shared with state tax departments.

Sales tax evasion has become a growing issue with the advent of internet shopping.  As of now, online retailers are not required to charge sales tax to customers. Instead, the onus is on the buyer to report their purchases to their individual state.  As a result, much of these purchases go unreported.  States lose an estimated $20 billion to online sales tax evasion.

While sales tax evasion may seem easy to get away with, the risks are still great.  Both buyers and sellers risk state charges related to tax fraud if they commit sales tax evasion.  State tax evasion convictions often include heavy fines and even imprisonment.

  • Sitemap
  • Contact Us

646-808-3345

©2012 All Rights Reserved Attorney Advertising | Disclaimer