Three gas station operators in Illinois are currently facing severe legal charges, including theft, fraud, and tax evasion. The Illinois Attorney General, Kwame Raoul, has announced that Roger Multani, a 29-year-old resident of Peoria, Illinois, along with Surinder (Paul) Singh, aged 34, and Jitender (Jay) Singh, aged 33, both from Indianapolis, Indiana, have been charged in Peoria County Circuit Court and Sangamon County Circuit Court with multiple counts of theft, fraud, and tax evasion.
These individuals are the owners and operators of more than a dozen gas stations located in Central and Southern Illinois. According to the charges, they deliberately underreported sales amounting to over $50 million over a three-year period from 2019 to 2022. This intentional underreporting has resulted in a tax liability of over $4 million.
Attorney General Raoul expressed his concerns regarding these allegations, stating, “Individuals who underreport sales taxes are stealing from the state and the residents in their communities who rely on the important programs and services stolen tax revenues are intended to fund. I appreciate the continued partnership of the Illinois Department of Revenue as we work together to hold these individuals accountable.” (Source: Mike Mohundro, WSILTV.com)
The investigation into these alleged crimes was led by the Illinois Department of Revenue. David Harris, the Director of the Illinois Department of Revenue, highlighted the negative impact of fraudulent business practices, stating, “Fraudulent business owners who underreport their income not only cheat the IDOR and Illinois taxpayers but also other businesses that comply with their tax obligations and seek to compete on a level playing field. Today’s indictments demonstrate that there is a serious price to pay for this type of conduct, and IDOR will continue to work closely with the Attorney General’s Office to prosecute those who break the law.”
Underreporting sales tax can have significant consequences for the government and other businesses. Let’s look at a few ways it can have an impact.
Consequences of Underreported Sales Tax
Loss of Government Revenue
When businesses underreport sales tax, it directly affects government revenue. Sales tax is a crucial source of income for states and local governments, contributing to public services, infrastructure development, education, healthcare, and other essential programs. Underreporting sales tax reduces the funds available for these initiatives, potentially leading to budget shortfalls and affecting the delivery of public services.
Reduced government revenue due to underreported sales tax can lead to budgetary constraints. Governments may be forced to cut spending in various areas or increase taxes in other areas to compensate for the lost revenue. This can impact the overall economic development and the ability to meet the needs of the community. Let’s break this down even further.
- Infrastructure: In the construction industry, underreported sales tax can hamper infrastructure development projects. Insufficient tax revenue can limit investment in roads, bridges, public transportation, and other vital infrastructure projects. This can impede economic growth and the overall quality of life in a region.
- Education and Healthcare: Reduced funding for education and healthcare services is another consequence of underreported sales tax. Schools may face budget cuts, leading to a decrease in resources, teacher layoffs, and a lower quality of education. Similarly, healthcare facilities may struggle to provide adequate services due to limited funding, affecting the accessibility and quality of healthcare in a region.
- Local Governments: Underreported sales tax can impact local government services such as police and fire departments, parks, libraries, and community programs. Insufficient tax revenue means fewer resources available to maintain and improve these services, potentially compromising public safety and community well-being.
- Tourism and Hospitality: Regions heavily reliant on tourism and hospitality industries can suffer from underreported sales tax. Lower tax revenue means fewer resources for marketing campaigns, infrastructure upgrades, and tourism promotion efforts. This can hinder the growth of these industries and impact the overall economic health of the region.
Penalties and Fines
If convicted of underreporting sales tax, the penalties and fines you may receive depend on the laws and regulations of the jurisdiction in which the offense occurred. Depending on the dollar amount and the types of charges filed, whether civil or criminal, you can be looking at imprisonment of up to 30 years as well as hefty fines.
In the aforementioned case, Multani was charged in Peoria and Sangamon counties with one count of theft of property over $1 million and 15 counts of theft of government property over $100,000, all Class X felonies punishable by up to 30 years in prison. He was also charged with three counts of theft of government property over $100,000 and 14 counts of sales tax evasion over $100,000, all Class 1 felonies punishable by up to 15 years in prison. But that’s not all. He was further charged with three counts of sales tax evasion between $10,000 and $100,000, all Class 2 felonies punishable by up to seven years in prison; and one count of wire fraud, a Class 3 felony punishable by up to five years in prison.
As you can see, underreporting sales tax can have bigger consequences than if you had paid the taxes upfront.
How We Can Help
The case of underreported gas station sales in Central and Southern Illinois serves as a stark reminder of the implications of underreporting your sales tax. It highlights the loss of government revenue, the creation of an uneven playing field, and the negative economic impact.
At Sales Tax DataLINK, we can ensure that your sales taxes are never in danger of being under or overreported. We offer cutting-edge solutions to meet all your tax calculation needs. Our automated systems streamline the process, saving you time and minimizing errors. Whether it’s determining sales and use tax, B&O, VAT, and many others, our state-of-the-art technology ensures accuracy and precision. Discover sales and use tax calculations for manufacturers, fabricators, distributors, and more with Sales Tax DataLINK. Benefit from our comprehensive and customizable rate table, ensuring accurate results tailored to your unique business requirements. Contact us to see how we can ensure you always have accurate sales tax reporting.