My buddy Binkley points to this story about Enron Broadband Services copping to a charge of avoiding over $1 million in taxes.
A Harris County grand jury indicted Enron Broadband Services on Monday for claiming that a North Shepherd warehouse contained furniture and fixtures worth about $500, rather than more than $20 million in computer and telecommunications equipment.
The charge, made against the business itself and not individuals, is a Class A misdemeanor that carries a $4,000 fine.
[…]
Under Texas law, owners of tangible property used to generate revenue — computers, office equipment and work vehicles — are required to annually provide lists of that property and its value to the tax appraisal district. Appraisers use the lists to determine how much property tax a business owes, said Jim Robinson, Harris County Appraisal District’s chief appraiser.
But it’s estimated that nearly 60 percent of the 160,000 or so businesses required to fully divulge their property on the lists do not. Many companies and the tax consultants they hire to file renderings interpret the language of the law to mean the reports are optional, said Assistant County District Attorney Lester Blizzard.
“The laws at this point are rather nebulous,” said Blizzard. “We’re hoping with this case the state Legislature will take a look at the problem and bring forth more definitive laws that make it easier to understand and enforce.”
Boy, if those are the penalties, it’s no wonder so many companies look for favorable interpretations. There’s a loophole for the Lege to address, if they have the guts and want to take deficit reduction seriously.
The story notes how the Enron warehouse, about a mile and a half from where I live, was an open secret and that it was former employees who narced the company out. Says Binkley, who used to work for EBS:
[I]t seems that EBS claimed there was nothing inside [the warehouse] but office furniture. Overlooking, of course, the stacks and stacks for Sun and Cisco hardware stuffed inside. Did you know that at one point Enron was the single largest purchaser of Sun hardware, at least on paper? That sure made for a cozy relationship. I’d spill more, but who needs troubles like those?
Oh, Binkley, you tease. We’re all ears if you do decide to spill more.