Tinseltown greets Bill from behind the siege lines.

For Hollywood the good news is Dan Quayle has been silenced and a more friendly Democratic administration enters the White House in January.

The bad news is that the candidate many of them supported with their hefty donations, Bill Clinton, won't be able to call off the IRS and that will probably cost them millions in new taxes, Hollywood executives and observers say.

For the last two months some in the entertainment industry felt that "Under Siege" wasn't just the hot Steven Seagal film, but an apt description of Hollywood.

While Vice President Quayle was hammering the entertainment industry for its depiction of family values on "Murphy Brown," the Internal Revenue Service was quietly getting ready to open Hollywood's books and conduct extensive audits, which are now underway.

Creating a special entertainment task force and assigning 36 agents, the IRS is zeroing in on Hollywood's infamous accounting practices, which often result in hit films showing no profits on the books. Of special interest is the international film business and the common practice of actors, directors and technical people working as independent contractors and not as employees.

The IRS is not the only federal agency poking around studio lots. The Federal Bureau of Investigation is currently investigating Giancarlo Parretti's alleged mishandling of Metro-Goldwyn-Mayer Inc.'s assets during his brief 1991 owner/manager stint there. And the Federal Communications Commission came down hard on radio gadfly Howard Stern, in October, fining local station KLSX-FM a record $100,000 for airing his show.

The industry also has been taking hits in Los Angeles courts, losing the Art Buchwald vs. Paramount accounting case and Bud Yorkin block-booking suit. Buchwald, after winning a plagiarism suit against Paramount over the hit film "Coming to America," challenged the studio's accounting of the film and won a sizable jury award which he has yet to collect.

And producer Bud Yorkin won a $2.4 million jury verdict after challenging television syndicator ITC Entertainment. ITC packaged Yorkin's movie "Twice In A Lifetime" with 15 other films and allegedly forced independent TV stations to take all 16 films, a violation of antitrust laws. Yorkin contended his film lost revenue by being downgraded into the package.

Although all these incidents weren't connected, they were fostering a siege mentality among some in Hollywood.

"We have been under siege. (President George) Bush and Quayle used Hollywood as a scapegoat because they couldn't solve the real problems," says Jeff Wald, president of Jeff Wald Entertainment, a television and movie production house. "The IRS investigation is instilling fear and is a weapon a government uses to keep people silent."

"Clinton was able to raise millions here," Wald said. "But this community is not voting its pocketbook. My taxes will be going up probably because Clinton will be taxing people who make over $200,000."

The IRS investigation has been the most threatening element of the now lame-duck Republican administration. Entertainment attorneys said Clinton can't or won't call off the tax people because the probe was launched by the IRS independently and wasn't instigated by the Bush administration as part of the culture clash between a conservative White House and a liberal Hollywood.

Attorney Schuyler Moore is representing studios and independent film companies that are being audited. He said dollars, not politics, are in play.

"In my opinion this investigation is being driven by the federal deficit 100 percent," Moore said. "The government is willing to bite off its nose to spite its face.

"They need immediate income and see Hollywood as a ripe income source," he added. "This is not a shotgun approach but a well thought-out attack. If I had a wild guess, this could cost Hollywood $1 billion in additional taxes and penalties over the next five years."

Moore said there are non-stop audits being conducted over the next 45 days. He said he was able to close two audits so far without any additional taxes being paid, but he represents a company that might have to pay as much as $8 million.

The IRS is closely examining how films have been amortized, and foreign issues. If U.S. film companies are shielding revenue through affiliates in tax havens such as the Netherlands Antilles, the IRS wants a piece of those revenues.

The employee vs. independent contractor issue is another key area with negative implications for the studios as well as actors and directors. The IRS is probing whether independent contractors should have been classified as employees, with the studios withholding Social Security, unemployment and other payroll taxes.

And the new president is unlikely to rein in the IRS quest, Moore said.

"Clinton's election won't change a thing," he said. "The IRS operates like an independent posse. Besides, Clinton can't call them off, he has to raise taxes to fund his programs."

Wrangling between government and Hollywood is nothing new. Film historians point out that the industry has always been an easy target.

They cite Upton Sinclair's run for California governor in the 1920s when he proposed creating a California state film company to put the Depression's unemployed to work. The FTC's attack on Paramount Pictures in the 1930s over block booking (when the studios sold packages of films to theaters, forcing them to accept minor films to get the major ones they wanted) and the McCarthy era red-hunting congressional hearings in the 1950s are other examples of Hollywood's problems with the government.

However, Ronald Reagan, a former actor, was cozy with the industry during his 1980-1988 presidency.

UCLA film professor Jonathan Kuntz remarked, "Reagan was not inclined to look into Hollywood and for most of Bush's years he was friendly to the film industry. With the global integration of the industry (Japanese buying studios), the government has not intervened and the business is being vertically integrated. Attacking Hollywood comes in waves and this (IRS audits) seems to be the latest."

Marc Wanamaker, a film historian and creative consultant on productions, predicted the gap between Hollywood and Washington will close now with Clinton elected. Wanamaker said moviemakers irked the Republican power elite with films about gangs and violence that showed the country's social decay.

In particular, he said, the 1980s film "Wall Street," may have "backfired on Hollywood. It was a pivotal film that got lots of press and showed how capitalism had run amok, giving the finger to the masses with its 'greed is good' theme.

"This infuriated big business and the government," said Wanamaker, who said he believes Clinton will be more sensitive to social issues and won't attack filmmakers for their social commentaries.

Jack Valenti, president of the Motion Picture Association of America, the industry's lobbying group in Washington, succinctly said, "Hollywood has been under siege since the early part of the century. The advice I give to my colleagues is that time passes."