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Phila. Controller Alleges Widespread Tax Evasion At Small Construction Projects

By Mike Dunn

PHILADELPHIA (CBS) -- Philadelphia's city controller has issued a report alleging rampant tax evasion at construction sites around the city.

Controller Alan Butkovitz says his investigators visited numerous construction sites throughout the city and found what he believes is widespread evasion of wage and business taxes.

He says the contractors are using subcontractors who in turn hire other subcontractors.

"It's the Wild West in Philadelphia on construction projects," Butkovitz told KYW Newsradio today.  "People are being paid in cash, people reported receiving checks -- we got a copy of at least one check in which it was clear that there were no taxes withheld."

Butkovitz estimates that the tax revenues lost to the city to be in the millions, and he's recommending stricter enforcement by the Department of Licenses and Inspections.

The report also says investigators found numerous federal safety violations at these construction sites, which Butkovitz says are mainly small projects using nonunion labor.


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