The 37-year-old Sigel entered his plea Tuesday in federal court in Philadelphia.
U.S. prosecutors say he owes about $350,000 on $1 million of unreported income. But defense lawyer Fortunato Perri Jr. plans to challenge those calculations.
Sigel faces up to three years in prison at his Nov. 18 sentencing.
The rapper, born Dwight Grant, has served time on drug and weapons charges, and for prescription drug use while on federal probation.
But he has also led anti-violence rallies in hometown Philadelphia, and spoken to high school students about life choices.
Sigel's albums include "The Truth," "The B. Coming" and "The Solution."