Soliciting of News Media to Cover Tax Arrests Hit

SACRAMENTO — A top state tax official Friday criticized California income tax collectors’ newest practice of soliciting news organizations to cover the arrests of alleged tax cheaters--some in early morning hours at their homes.

“It’s not the way to collect taxes,” said Richard Nevins, one of three members of the Franchise Tax Board, the agency responsible for collecting state income taxes. “To get money (owed), you go out and put your liens on and you get your money. It doesn’t do much for you to put somebody in jail.”

Nevins, also a member of the State Board of Equalization, which administers state and local sales taxes, said the equalization agency uses “calm, measured methods to collect taxes . . . and I believe the same should be used by the Franchise Tax Board.”

State Controller Kenneth Cory, chairman of the Franchise Tax Board, expressed “concern” over the enforcement tactic. But a top Cory assistant, Walter Harvey, defended the practice, insisting that “these are people who have been contacted more than once, told they owe money or fail to file returns. They have been given every opportunity to come forward on their own hook and have failed to do so.”

Sharp Criticism

State Director of Finance Jess Huff, an appointee of Gov. George Deukmejian and the board’s third member, said he did not know enough about the situation to comment on it.

The situation, however, drew sharp criticism from Paul Hoffman, legal director of the American Civil Liberties Union of Southern California. Hoffman said the arrests with news media present were “improper and beyond the bounds of what is legitimate for government to do in informing the public of law enforcement activity.” He added that the television coverage “stigmatizes the person who is arrested and jeopardizes that person’s fair trial rights.”

As part of the state’s newly stepped-up enforcement program to capture an estimated $2 billion in unpaid income taxes, local news organizations have been alerted in advance by board representatives that an arrest or seizure of personal property is about to occur and are “invited” to cover the activity, said Jim Reber, a board spokesman. The resulting publicity acts as a deterrent to other cheaters or would-be cheaters, he said.

Widow Paraded by Newsmen

In one such arrest on Thursday, a 54-year-old Woodland Hills widow was awakened at 6 a.m. at her home and paraded past reporters and television cameras waiting in her driveway to record the arrest. She was charged with failing to appear for arraignment on four counts of failing to file state income tax returns.

Reber said that since last April, when an income tax amnesty program ended, the Franchise Tax Board has mounted an intensive enforcement program to catch cheats, and that one of its tools has been tipping off news organizations in advance of pending arrests. It is up to each news organization to decide whether it wants to cover the activity.

In the San Francisco Bay Area on Friday, Reber said, three alleged tax cheaters were arrested on various charges, including a Silicon Valley executive, a corporation controller and a luxury-car salesman. In each case, news organizations were alerted in advance and were present for the arrests.

Similar actions have occurred in San Francisco, Fresno, San Diego, Sacramento and Bakersfield, he said, adding that after the publicity, “compliance does improve. . . . People come in and say, ‘I want to clean up my account.’ ”

‘Dozens’ of Alerts

Reber said “literally dozens” of alerts to the news media have been issued, including advance notice on the arrest of Los Angeles radio personality Bill Jenkins last autumn. He noted that Jenkins was convicted of failure to file tax returns for 1979-81.

Cory aide Harvey noted that law enforcement organizations often tip television stations in advance of arrests that they want publicized, such as those of drug dealers and prostitutes.

Cory summoned the executive officer of the Franchise Tax Board, Gerald H. Goldberg, to his office for a meeting Friday. Harvey, who attended the session, said, however, that Goldberg was given no suggestions on whether to stop issuing media alerts or to continue them.

Harvey said Goldberg was told to discuss the situation with Nevins and Huff. “The Franchise Tax Board is going to look into this,” Harvey said.

Times staff writer Bill Johnson in the San Fernando Valley contributed to this article.