Section 110 Civil Fraud or Evasion

• Library: Tax Law 2009

Section 144.500, RSMo 2000, of the Sales Tax Law, §§ 144.010–144.525, RSMo 2000 and Supp. 2007, and § 144.675, RSMo 2000, of the Compensating Use Tax Law, §§ 144.600–144.761, RSMo 2000 and Supp. 2007, address situations in which a person acts or fails to act with the intent to commit fraud or evade tax. In those cases, MoDOR shall determine the amount of tax sought to be evaded and add an ad valorem penalty equal to 25% of it. This penalty shall be assessed against the taxpayer, with written notice of the assessment served personally or by registered (Sales Tax Law) or certified (Compensating Use Tax Law) mail. But the AHC cannot impose the fraud penalty “ab initio” if not in MoDOR’s original assessment. All Star Amusement, Inc. v. Dir. of Revenue,Nos. 90-000065RZ; 90-000076RZ; 90-000320RZ; 91-000350RS, 1993 WL 49755 (Mo. Admin. Hearing Comm’n, Feb. 16, 1993).

These state fraud penalties are more lenient than the corresponding federal civil penalty tax...