Asked in Tax Law for Illinois

Q: Hi! I just wanted to know how does the tax department figure out that a person hasn’t paid his taxes in the state?

What measures do the department take to find out a non resident in the state. For example, if a person is staying in the state but hasn’t paid any taxes.

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1 Lawyer Answer
James L. Arrasmith
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  • Tax Law Lawyer
  • Sacramento, CA

A: When a person hasn't paid their taxes in a state, the tax department employs several strategies to detect this non-compliance. They use data from various sources, such as employers, banks, and other financial institutions, which report income and financial transactions to the authorities. This data is cross-referenced with the tax returns filed by individuals. If discrepancies are found between the income reported and the taxes paid, it can trigger a review or audit.

Additionally, the department may use information from federal tax returns, as these often include details on income earned in different states. For people who might be living in one state but earning income in another, this information is crucial to ensure they are paying taxes appropriately in the state where the income is earned.

If you're concerned about your tax situation or think there might be an issue with your taxes in a particular state, it's advisable to consult with a tax professional who can help clarify your tax responsibilities and assist in resolving any potential problems with the state tax department. It's better to address these issues proactively to avoid penalties and additional charges.

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