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 North Dakota, as in all states, tax evasion is considered a serious criminal offense. Under federal law, specifically 26 U.S.C. § 7201, any individual or entity that willfully attempts to evade or defeat federal tax liability is committing a felony. Conviction can result in fines of up to $100,000 for individuals and $500,000 for corporations, imprisonment for up to 5 years, or both, along with the costs of prosecution. At the state level, North Dakota has its own tax statutes that make it illegal to evade state taxes, which include income, property, sales, franchise, payroll, and other state-imposed taxes. Penalties for state tax evasion can include fines, imprisonment, or both, depending on the severity of the offense and the specific provisions of North Dakota tax law. It is important for individuals and entities in North Dakota to comply with both federal and state tax laws to avoid these severe penalties.