Tax fraud among gas station operators is 'pervasive'

[n2doc]

By Melissa Harris, Tribune reporter
September 25, 2011

More than one-fourth of Illinois gas station operators have underreported the amount of fuel they sell to the public, allowing them to pocket millions of dollars in sales tax owed to the state.

Within the last 18 months, grand juries have indicted 14 Illinois gas station operators on charges of illegally withholding a portion of the sales taxes their customers paid at the pump.

But the indictments do not come close to reflecting the extent of the fraud, state officials say. Thus far, the Illinois Department of Revenue has identified 651 gas station operators who have allegedly cheated the state. Officials say they have recouped $54 million in back sales taxes, interest and penalties, most of it through quiet settlements or after violators came forward under the threat of greater penalties.

Illinois law prohibits the state from disclosing the names of the nonindicted operators, but the numbers reveal that 27 percent of the state's approximately 2,400 gas station operators had underreported their sales at some point during the last four years. That percentage could grow. Attorney General Lisa Madigan and Illinois Department of Revenue Director Brian Hamer say they are nowhere near finished cleaning up the "pervasive" abuse, with Hamer's office set to embark on a third wave of audits.

"I think it's certainly the case that the industry knows that we're on to the widespread cheating," Hamer said. The telltale sign? "We have noticed in many cases where gas stations have suddenly increased their monthly remittances to the Department of Revenue, in some cases in dramatic fashion."

more

http://www.chicagotribune.com/business/ct-biz-0925-gas-tax-20110925,0,6417746.story

[msongs]

1. they are also cheating customers by charging a fee they are not forwarding nt

[unblock]

6. not really. the customer is paying exactly what the customer is supposed to pay

once the customer makes the purchase, the sales tax legally belongs to the taxing authority, the vendor is acting as its agent.
it's not the customer's money that's being stolen, it's the government's money.

[Sirveri]

8. Those fees typically go to road maintenance, so they cheat the customers that way.

Worse roads for all the people who are paying to upkeep them and paying for their usage.

[RC]

2. How can they under report what they sell?

If they buy X gallons and sell X-a, then it should be obvious that something is wrong.

[Recovered Repug]

4. I think the hard part would be tracking how much each gas

station purchases. There would be a total that the supplier sold, but that would be to multiple stations. I suppose that the tax could be included in the purchase price and collected from the supplier.

[Hassin Bin Sober]

3. Seems like a stupid thing to cheat on - unless the state isn't paying attention. Which it wasn't.

It shouldn't be hard to determine how much gas they purchase from suppliers versus how much the station sells. Minus a little for evaporation and theft.

[saras]

5. Role models. It's all about role models.

"It's illegal and infuriating," Madigan said. "Gas is expensive enough. And if you're not going to give my taxes to the state, you should at least let me keep it."

Don't take my money and then evade taxes. Let ME evade taxes.

Yeah.


I can't say I feel too terribly bad about it, though. I'd rather the money went to them than to Shell, Exxon, etc. EVEN IF I'd even more rather have the money in my own pocket. Keeping it local, so to speak.

But as far as running a business, laws are incredibly complicated, and it makes sense to imitate the biggest, most wealthy, and most successful companies if you're not sure exactly what policy to adopt. Wholesale avoidance? - it works GREAT for multinationals.

Yes, I know there's a whole different school of thought about business that suggests just doing something ethically and well, and trusting that that niche will support you. I like them too. Maybe even better.

[safeinOhio]

7. I'd bet it's not as much as they steal

by being slow to drop prices when wholesale prices drop and fast to raise prices when they "think" wholesale prices are going to rise.

I work for a retail gas station. Also in my town, one retailer sets the price. There is never more than a few cents difference in town.