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About Tax Fraud

Tennessee Tax Fraud Home

What is tax fraud?

Fraud is a deception deliberately practiced in order to secure unfair or unlawful gain. As it relates to taxes, it's simply "cheating" by intentionally paying less tax than is legally due.

How does tax fraud affect me?

Since dishonest people are not paying their fair share, there is not a "level playing field" for businesses or consumers. This can sometimes lead to higher prices, possible tax increases, and inadequately funded school systems as well as other government supported programs. The burden of covering these shortages falls on honest taxpayers and the public in general.

What are common types of tax fraud?

Note: Civil and criminal penalties for tax fraud vary by tax.

  • Sales and Use Tax - Fraudulent filing, non-filing or other tax violations committed by persons and/or businesses. Click here for more information about sales tax evasion.
  • Business/Corporate Tax - This also includes running an unlicensed businesses; city, county and Franchise & Excise taxes.
  • Tobacco Tax - These violations include the illegal sales of unstamped cigarettes, smuggling or hijacking cigarettes, counterfeiting tax stamps or other attempts to circumvent the state tobacco and MSA tax. This also includes violations of the Unfair Trade Laws in Tennessee.
  • Hall Income Tax - The Hall income tax is imposed only on individuals and other entities receiving interest from bonds and notes and dividends from stock.
  • Motor Fuel Taxes - This includes intentional circumvention of state motor fuel tax laws by persons in the trucking industry, motor fuel distributors, retail establishments and indivuduals.

If you suspect tax fraud or tax violations, click here for more information on how to report it to the Department of Revenue.