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AUDIT REVEALS TAX EVADERS AT HARBOR, AIRPORT.

Byline: Rick Orlov Daily News Staff Writer

The Harbor and Airport departments don't properly track whether their tenants are paying business taxes, an oversight that could be costing Los Angeles hundreds of thousands of dollars, an audit released Monday found.

In a review of 100 of the 907 firms doing business with the Harbor Department, City Controller Rick Tuttle found that 69 percent failed to have a business tax certificate and there was no indication they had paid business taxes.

If the percentage of firms not paying taxes holds true, as many as 625 businesses might be avoiding the tax, officials said.

At Los Angeles International Airport, Tuttle found 13 companies did not appear to be paying their business taxes.

``There are a whole lot of companies out there that aren't paying their taxes,'' Chief Deputy Controller Tim Lynch said. ``We think it's time to stop talking about doing something and actually do something.''

The audit looked at firms that do business with the two departments, primarily tenants that rent space at the harbor or the airport.

It was prompted by Tuttle's desire to see if the independent agencies were requiring firms to show whether they had taken out a business tax registration certificate, said James Armstrong, who oversaw the audit for Tuttle.

``As we made inquiries, we found no one had looked at either of them for some time,'' Armstrong said.

Armstrong said the estimated loss to the city could be around $638,000. That number is based on past reviews showing the average firm pays $1,000 a year in taxes.

``There are a lot of small firms here that would be in that range, but there also are some large firms that could owe substantially more,'' Armstrong said.

Officials with the two agencies said they would review the audit and pledged to cooperate with city officials on making any needed changes.

Among other recommendations, the audit urged the two departments to do a firm-by-firm search to determine if they had business licenses and also develop an education program for tenants.

Tuttle also asked the City Clerk's Office to develop a system over the next 30 days to deal with the situation.
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Publication:Daily News (Los Angeles, CA)
Date:Dec 30, 1997
Words:364
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