Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, August 6, 1993                   TAG: 9308060043
SECTION: VIRGINIA                    PAGE: B1   EDITION: METRO 
SOURCE: DALE EISMAN STAFF WRITER
DATELINE: RICHMOND                                LENGTH: Medium

SOME CPAS' TAX RECORDS DON'T ADD UP

State tax collectors reported Thursday that 470 certified public accountants, roughly 5 percent of the total licensed, failed to file Virginia income tax returns for 1990 and/or '91.

The non-filers included CPAs who advertise their services in the Yellow Pages, some whose firms issued them W-2 forms for large salaries and some who own expensive cars and have large mortgage loans but claim less than $10,000 in annual income, said Tax Commissioner W.H. Forst.

"We were genuinely surprised by the large numbers," Forst said.

CPAs were the first professional group targeted by the state in a new campaign to crack down on tax cheats. "We started with CPAs because, frankly, we wanted to keep our first project manageable," Forst said. "We assumed the level of noncompliance . . . would be minimal."

The non-filers were located by comparing a list of all accountants licensed in the state to a list of people who've filed tax returns. Similar efforts are planned for other groups.

Forst said his department wrote to the non-filing CPAs this week, inviting them to file now or provide an explanation for their failure. Those whose explanations are unsatisfactory face audits, assessments, penalties and possible prosecution, he said.

Failure to file a required return in Virginia can be punished by up to 12 months in jail and/or a fine of up to $1,000.

Short of prosecution, the tax department apparently has no way to keep non-filing CPAs from continuing to prepare the returns of other Virginians. Forst noted that state law protects the privacy of tax records, so his agency can't inform the State Board for Accountancy, which licenses accountants, of any non-filers.

Herman D. Nobrega of Alexandria, chairman of the Board for Accountancy, said the 5 percent figure for noncompliance "sounds a little high to me." But he noted that many accountants do not prepare tax returns; in his own firm, he once spent several years doing nothing but audits, Nobrega said.