There are both state and federal laws that criminalize tax evasion and tax fraud. These laws are violated when a taxpayer intentionally attempts to avoid paying a tax. Some common examples of tax evasion include:
The chart below outlines South Dakota's main tax evasion law.
| Code Section | South Dakota Code section 10-46-37: False or Fraudulent Returns in Attempt to Evade a Tax |
| What's Prohibited? | Any person required to make, render, sign, or certify any tax return (or supplementary tax return), who makes a false or fraudulent return in an attempt to defeat or evade a tax. |
| Penalties | Tax fraud is a Class 1 misdemeanor that is punishable by one year in jail, and/or a $2,000 fine. |
Mistakes Do Not Constitute Tax Evasion
Tax codes can be very complicated and taxpayers often make honest mistakes when filing their tax returns. A taxpayer can only be convicted of tax fraud or tax evasion if their false return was filed with the intent to defeat or evade a tax. In other words, mistakes that are made in good faith can't constitute tax evasion or tax fraud in South Dakota.
Report Tax Evasion
The South Dakota Investigative Survives Bureau (IBS) is responsible for investigating suspected tax fraud, tax evasion, and other acts that circumvent the state's revenue laws. Known or suspected tax fraud in South Dakota should be reported to the IBS via their website.
Federal Tax Fraud and Tax Evasion
Tax fraud and tax evasion are also illegal under federal law 26 U.S. Code § 7201. Under this law it is a crime for any person to willfully attempt in any manner to evade or defeat any tax imposed by law. Tax evasion is a felony offense that is punishable by imprisonment for up to five years, and/or a fine of up to $100,000 ($500,000 in the case of a corporation).
Additional Resources
State laws change frequently. For case specific information regarding South Dakota's tax fraud and tax evasion laws contact a local tax attorney.
