Controller: Unregistered Sub-Contractors Create Tax Loophole - DC News FOX 5 DC WTTG

City Controller: Unregistered Sub-Contractors Create Tax Loophole

Posted: Updated:
PHILADELPHIA -

In a report released Tuesday, Philadelphia City Controller Alan Butkovitz says unregistered subcontractors have created a tax enforcement loophole and unsafe working conditions at several construction sites around the city.

The report, "Review of City Tax Evasion at Construction Sites," is the result of a 23-site investigation.

The report was put together after the city controller's office says it received information that commercial and residential construction contractors were compensating workers by cash or check to avoid reporting wage and business taxes.

Butkovitz says the investigation found nearly 100 conditions that violated tax laws or public safety ordinances -- many of which are being reviewed as City Code amendments by Councilmembers Bobby Henon and James Kenney.

According to the report, the investigation found more than a dozen sites where sub-contractors were not identified on various permits, which would make it difficult to determine if they were appropriately licensed.

At six sites, the report found that it could not be determined if contractors or sub-contractors even had an active business privilege license, which Butkovitz says is needed or else the "appropriate city business taxes cannot be properly filed and paid."

Butkovitz says his office found instances where it was very likely that general contractors were circumventing the collection of taxes but not properly identifying all of the workers on active job sites.

"Our prior study on the Underground Economy in Philadelphia estimated a direct cost to the city from lost wage taxes amounts to $2.1 million to $7.4 million," Butkovitz said.

According to his office, city council strengthened the Licenses and Inspections permit application and disclosure process to require contractors and sub-contractors to submit identifying information, such as their name and address.

Additional legislation has included public hearings to allow for the review and investigation of illicit construction industry practices, Butkovitz said.

You can read a full version of the report on the City Controller's website.

  • Local NewsMore>>

  • Police: Boater Disappearance May Have Been Staged

    Police: Boater Disappearance May Have Been Staged

    Friday, August 1 2014 6:28 PM EDT2014-08-01 22:28:19 GMT
    Egg Harbor Township Police believe the disappearance of a boater in July may have been staged.
    Egg Harbor Township Police believe the disappearance of a boater in July may have been staged.
  • New Video Game Sparks Debate In South Jersey

    New Video Game Sparks Debate In South Jersey

    Friday, August 1 2014 5:30 PM EDT2014-08-01 21:30:49 GMT
    Video games may be pure fantasy, but a violent action-adventure game called "Watch Dogs" has ignited a very real debate in one South Jersey community. Watch Dog allows players to adopt the persona of a James Bond-like computer hacker, chasing an evil mastermind. People say it's chock-full of foul language, sex and violence, features dark and foreboding backdrops. The latest version, which is due out this fall may be set in Camden.
    Video games may be pure fantasy, but a violent action-adventure game called "Watch Dogs" has ignited a very real debate in one South Jersey community. Watch Dog allows players to adopt the persona of a James Bond-like computer hacker, chasing an evil mastermind. People say it's chock-full of foul language, sex and violence, features dark and foreboding backdrops. The latest version, which is due out this fall may be set in Camden.

  • SOGGY WEEKEND

    Friday, August 1 2014 5:24 PM EDT2014-08-01 21:24:23 GMT

    Saturday will start off unsettled, especially S&E, but towards the afternoon most of us should remain drier with light scattered showers.

    Saturday (79/68): AM Rain, PM Clouds

    Weekend, clouds will stick around throughout Saturday and Sunday as wet weather dampens the first weekend in August. Saturday will start off unsettled, especially S&E, but towards the afternoon most of us should remain drier with light scattered showers. There is a better chance for more widespread precipitation Sunday with on and off showers/thunderstorms possible.

    Saturday (79/68): AM Rain PM Clouds

    Sunday (81/68): Cloudy, Showers & T-Storms

Powered by WorldNow
Untitled

WTTG FOX 5 & myfoxdc
5151 Wisconsin Ave. NW
Washington, DC 20016
Main Number: (202) 244-5151
Newsroom: (202) 895-3000
fox5tips@wttg.com

Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | New Terms of Service What's new | Ad Choices