By KERRY SMITH, EDITOR, ST. LOUIS CONSTRUCTION NEWS AND REVIEW MAGAZINE
The St. Louis – Kansas City Carpenters Regional Council’s parent organization is continuing its efforts to fight more than $8.4 billion annually in tax fraud perpetrated by dishonest contractors across the U.S.
According to the United Brotherhood of Carpenters (UBC) and Joiners of America’s campaign, Stop Tax Fraud (http://stoptaxfraud.net), a minimum of one in five contractors commits federal tax fraud. The labor organization is continuing to raise awareness and wage a comprehensive effort to fight it.
“Hundreds of thousands of construction workers never see a W-2 because their bosses are paying them off the books,” said Frank Spencer, second vice president of the UBC. “In addition to fleecing the taxpayers, these cheating contractors are also shortchanging their workers. When these workers get hurt, they do not have workers’ comp. When they get laid off, they do not have unemployment. When they retire, they have nothing,” he added, “no social security or other retirement plan, all because their employers were committing fraud.”
Annual tax losses due to fraud, according to the UBC, are enormous. The federal government loses $115 million annually in Tennessee alone. New Jersey sees $26.3 million in state taxes disappear every year due to construction industry fraud. In Texas, that number is $1.06 billion.
“Legitimate contractors compete against these companies that don’t pay (income or employment) taxes,” Spencer said, “and that’s extremely hard to do. It puts honest contractors at a competitive disadvantage.”
The UBC’s fraud prevention campaign normally includes Tax Fraud Days of Action, where contractor employees and employers actively participate in public awareness events. But the COVID-19 precautions have temporarily halted these events, Spencer said.
“Suspending these events is disappointing but necessary during these times,” he said. “That being said, the COVID-19 outbreak is providing a stark example of why construction industry tax fraud is so damaging. There is no doubt that the coronavirus crisis is aggravated by having two million construction workers who routinely go without workers’ comp and unemployment insurance protections when they should have them. During this public health and economic crisis, it is also very clear that the construction tax fraud problem compounds the difficulties of shoring up individuals, companies and the entire economy. If the industry were operating as it should, our public treasures would be better able to relieve the economic misery to come,” Spencer added.
For more information on how you can assist in curbing construction industry tax fraud, go to www.standinguptotaxfraud.net.