This is a follow-up to a piece we did last year on California’s efforts to tax the underground economy.
In our October 9 post last year, we noted that that California state government had set up a task force to go after what politicians contend is widespread tax evasion. This activity allegedly takes place beneath the radar of the tax-filing system.
In this post, we will update you on some of the initiatives undertaken by participants in the task force.
One of these participating agencies in the initiative is the California Board of Equalization (BOE). The BOE has launched a website to be used by the general public for reporting possible tax evasion or related crimes such as money laundering.
The term “underground economy” does not have a precise definition. It generally refers to transactions that are conducted entirely in cash or use some other means, such as counterfeit currency, to evade tax scrutiny.
The Board of Equalization asserts that California loses out on upwards of $8 billion a year in tax revenue from these underground endeavors. That is why the General Assembly authorized the formation of the task force last year. It is a state-federal initiative that also involves the FBI.
A problem of such magnitude is not something that any single piece of legislation or task force can easily address. Under the authorizing legislation, the task force has another five years to run.
We will continue to follow the thread of these underground enforcement efforts periodically in upcoming posts.
Source: Sacramento Business Journal, "State tax agency unveils economic crime reporting site," Allen Young, Oct. 27, 2014