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.

Here are examples of behavior or patterns that may indicate a person or business is committing tax fraud:

• Deliberate failure to file all types of tax returns  
• Deliberate failure to report all income received during the tax year
• Claiming residency in another state for the purpose of evading Minnesota taxes
• Understating income or overstating business expenses in prepared documents, books, and records
• Filing a sales tax return and deliberately omitting sales tax transactions on which sales tax was collected
• Bringing cigarettes or other tobacco products from lower tax states to resell in Minnesota
• Operating a business using someone else’s name
• Deliberately misrepresenting or omitting data on a tax return
• Operating a business even though it's not allowed because taxes have not been paid to the state (operating after revocation)