Signs of Potential Tax Evasion or Tax Fraud
Tax crimes usually involve repeated violations over time, rather than an isolated event or single occurrence. Certain behavior or patterns may indicate someone is committing tax fraud or evading taxes.
For example, a tax evader often spends a lot more money than is typical for someone in their occupation. It’s often unclear where the additional funds for this spending could be coming from.
Signs to Look For
- Claiming more dependents than the person(s) have
- Claiming residency in another state
- Closing and starting new businesses repeatedly
- Concealing financial or personal assets
- Having missing records
- Having weak financial controls
- Maintaining records poorly
- Maintaining separate set of books
- Micromanaging accounts or books
- Not filing Minnesota income tax returns
- Not reporting all of income
- Overstating expenses
- Refusing to delegate accounting or financial responsibilities to employees
- Suddenly spending more, possibly on luxury items or collectibles
- Using cash extensively
- Understating income
Report Tax Evasion or Tax Fraud
If you suspect potential tax evasion or tax fraud, please report it to the Minnesota Department of Revenue.