Important note: Information in this article was accurate in 1985. The state of the art may have changed since the publication date.
The New York Times - November 10, 1985
George James
"There is no doubt," Mr. Koch said, "there are tens of thousand of individuals and businesses who are not paying taxes - city, state and Federal taxes - who are part of the underground cash economy, and we must go after them jointly."
The Mayor said his proposal was prompted by the disclosure this week that a bar closed by the city for permitting sexual activities linked to the transmission of AIDS - acquired immune deficiency syndrome - had been granted tax-exempt status by the state as a not-for-profit corporation in 1976.
'The Underground Economy'
City and state officials are investigating whether the bar, the Mine Shaft, at 835 Washington Street in Greenwich Village, had paid other taxes not exempted by its nonprofit status, ranging from commercial-rent taxes to payroll taxes.
Mr. Koch said he had directed his Commissioner of Finance, Paul A. Crotty, to arrange a meeting with his counterparts in the State Taxation and Finance Department and the Federal Internal Revenue Service to explore the task-force idea.
"I'm going to ask that we have a joint investigation," Mr. Koch said, "involving all of our tax personnel, to work on a task force to examine not only these industries, but to see what we can do jointly to deal with the underground economy to a greater extent than is currently the case."
"We have to use our joint expertise, our joint personnel, our joint computers, and our brains to figure out ways to catch them," he said.
The Mayor said he would notify Governor Cuomo and President Reagan of his plan.
Retail Establishments Indicted
Asked for examples of the types of businesses the task force would investigate, Mr. Koch replied, "Anyplace where you pay cash."
In 1980 the Koch administration began a computerized program to detect evaders of city business and income taxes. By December 1983, more than 55,000 individuals and companies had paid $43 million in delinquent taxes and penalties.
The city investigation into tax evasion has prompted indictments against some of Manhattan's most fashionable retail establishments in recent months.
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