Tax inspectors hit target in Italian ski resort

ROME Thu Jan 5, 2012 11:24am EST

A competitor makes a training run before the second run of the women's World Cup Giant slalom ski event in Cortina d'Ampezzo, north Italy January 21, 2007. REUTERS/Stefano Rellandini

A competitor makes a training run before the second run of the women's World Cup Giant slalom ski event in Cortina d'Ampezzo, north Italy January 21, 2007.

Credit: Reuters/Stefano Rellandini

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ROME (Reuters) - Italian officials combating a national plague of tax evasion hit the jackpot in a swoop on a posh ski resort, catching 42 drivers of Ferraris and other luxury cars who had declared incomes of less than 30,000 euros ($38,700) a year.

The technocrat government of Mario Monti is stepping up a war on tax evasion that robs the Italian exchequer of an estimated 120 billion euros a year, nearly four times the value of the prime minister's new austerity budget.

Amid howls of protest from local officials, conservative politicians and shop owners, 80 tax inspectors fanned out through Cortina d'Ampezzo, one of Italy's smartest ski resorts, on December 30.

They have now reported that of 251 "super cars" checked in the Dolomites town, 42 belonged to people "who could barely make ends meet" on declared annual incomes of less than 30,000 euros, and 16 to people with declared incomes of under 50,000 euros.

Some 19 luxury cars were owned by companies that declared a loss in both 2009 and 2010, and 37 by firms reporting annual revenue below 50,000 euros, the inspectors' statement said.

Their bonanza did not stop there.

Their investigations of Cortina's swish restaurants showed that the receipts recorded by cash tills under surveillance were 300 percent higher than those declared a year earlier, before Italy was hit by the worst of the economic crisis.

They were more than double those of the previous day, reflecting the practice of not issuing receipts, which are registered for sales tax.

The jump was an even bigger 400 percent in luxury shops in the resort, a favorite haunt of millionaires and showbiz stars.

PAIN

Italy has one of the world's highest rates of tax evasion and Monti, whose budget of spending cuts and tax rises is hitting Italian households hard, is under pressure to spread the pain fairly.

Italy's huge public debt and almost static growth have put it at the heart of the euro zone debt crisis.

Monti was appointed in November, replacing flamboyant tycoon Silvio Berlusconi, to try to end a loss of confidence on financial markets that has pushed the country's borrowing costs to untenable levels.

Italian authorities are using new weapons against tax evasion including comparing citizens' declared incomes with their bank deposits and ownership of homes and luxury items like yachts and sports cars.

They have also capped cash transactions at 1,000 euros to tackle another common form of tax evasion - the undervaluing of goods and services. Italy's dentists are notorious for offering a discount if paid in cash.

Special dogs capable of sniffing bank notes have recently been stationed at Italy's borders to detect people trying to smuggle out their savings in attaché cases and suitcases.

Two letter bombs were sent to the tax collection agency Equitalia's offices in Rome last month. One was intercepted but the other blew off part of a finger of the agency's director general. They were claimed by an anarchist group.

(Editing by Tim Pearce)

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Comments (3)
JamVee wrote:
This would be an obvious technique for the US to use also.

You could start by taking a look at the declared income of those owning similar cars, and boats, houseboats, and motor homes worth more than $250k.

Jan 05, 2012 11:54am EST  --  Report as abuse
JimsZ wrote:
@JamVee – How about we say autos over $50k, boats over $25k, and homes over 100% of average sales price for the city (for example, average housing cost is $142k so anything over $284k and they get looked into??

Maybe these IRS agents need to do something besides hassle us that DO pay our taxes

Jan 05, 2012 3:37pm EST  --  Report as abuse
Pedro07 wrote:
Have Italian tax authorities just figured out that they can control wealth and revenues by checking individuals assets??? Have these “tax authorities” been asleep until now???? What a joke!!! “Italian authorities are using new weapons against tax evasion including comparing citizens’ declared incomes with their bank deposits and ownership of homes and luxury items like yachts and sports cars.”

Jan 06, 2012 10:27pm EST  --  Report as abuse
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