Iowans who might try to dodge state taxes when the deadline comes up in a few months should be careful — state officials are watching. Randy Lane of the Iowa Department of Revenue and Finance says a common tax dodge occurs on the western side of the state.Iowans try to get around state taxes by setting up a post office box in the border state of South Dakota, which doesn’t have an income tax. Lane says those people are still required to pay Iowa taxes.Lane says your tax status doesn’t change until you give up your Iowa diggs.Iowa law says you remain a resident until you abandon or sell your residence in Iowa. Lane says South Dakota isn’t the only state used to try and evade Iowa taxes, he says “snowbirds” sometimes claim they live in Texas and Florida and try to avoid Iowa taxes.He says you may avoid taxes, but could end up living in a state prison if you try this tax dodge.The fines vary from 500 to five thousand dollars and you could be subject to jail time, depending on the severity of the charge. Lane says they’ve prosecuted 15 such cases in the past several years. The latest case, completed in December, involved a Sioux City man who was given two years probation and over 500 dollars in fines.
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