People in this town like to grumble about cab drivers, and one grumble heard frequently is that many don’t pay their taxes.
No less than Leon Swain, former D.C. Taxicab Commission chairman and famed federal informant, has insisted to me on numerous occasions that tax evasion is widespread among cabbies, who of course operate in a largely cash business. Industry leaders, meanwhile, tell me that drivers are by and large a law-abiding group, with the occasional bad apples you find in any bushel.
Well, Attorney General Irvin B. Nathan announced today that the city has successfully concluded three rare prosecutions of cabdrivers for tax fraud. Cabbies Joseph Lane Jr., Robert L. Reeder and Southall E. Seay Jr. seem to have failed by dealing not strictly with everyday street hails, but with a government program with actual accountability:
An investigation by the District of Columbia Office of Tax and Revenue found that during tax years 2005 and 2006, all three defendants participated in a Medicaid Transportation Program under which D.C. cab drivers transport Medicaid recipients to and from various medical treatment appointments in return for payments made by the District of Columbia.
The defendants received between $48,496.00 and $144,515.00 per year from the Medicaid Transportation Program, but failed to pay any taxes associated with income from the program or to report these monies on their individual and/or unincorporated business franchise tax returns.
Lane and Seay have received suspended sentences, probation, community service, in addition to having to pay their tax bills. Reeder is set for an October sentencing.
Worth noting: Swain said earlier this year he was dismissed by Mayor Vincent C. Gray after handing a list of city-licensed cab drivers and limo operators to the D.C. Office of Tax and Revenue, which intended to share it with the Internal Revenue Service. Swain also said he had intended to require cab companies to submit copies of their income tax records as part of their licensing. Gray did not discuss his reasons for the dismissal; Swain wasn’t given a reason.