Tax evasion is the criminal offense of a person or entity using illegal methods to avoid paying the person or entity’s true tax liability. The Internal Revenue Code—a federal statute located in the United States Code—states that “[a]ny person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.” 26 U.S.C. §7201.

Tax evasion is also a criminal offense under state law when a person or en,tity uses illegal methods to avoid paying state income, property, sales, franchise, payroll, and other taxes.

In Indiana, as in all states, tax evasion is considered a serious criminal offense. Under federal law, specifically the Internal Revenue Code (26 U.S.C. §7201), any person who willfully attempts to evade or defeat any federal tax or payment thereof may be charged with a felony. Penalties for such a felony can include a fine of up to $100,000 for individuals ($500,000 for corporations), imprisonment for up to 5 years, or both, along with the costs of prosecution. Similarly, under Indiana state law, tax evasion related to state taxes such as income, property, sales, franchise, payroll, and other state-imposed taxes is also a criminal offense. The state statutes provide for penalties that may include fines, imprisonment, or both, depending on the severity of the offense and the amount of tax owed. It is important for individuals and entities in Indiana to comply with both federal and state tax laws to avoid these severe consequences.