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UMASS/AMHERST 3150bfc,Dlbb7flfl73 THE COMMONWEALTH OF MASSACHUSETTS OFFICE OF THE INSPECTOR GENERAL A Study of Improper Motor Vehicle Registrations &Cr 1 7 1997 {Mm* ^®**x Robert A. Cerasoli Inspector General March 1997 Cl]c Cmumortfcocalil] of 4jftassad|usrits (Office of tf[c 3nspccior (Scnrral One Ashburton Place, Boston, MA 02108 ROBERT A CERASOLI JOHNW MCCORMACK INSPECTOR GENERAL STATEOFFICEBUILDING ROOM 1311 TEL 727-9140 FAX 7233540 March 1997 His Excellency the Governor The Honorable President of the Senate The Honorable Speaker of the House of Representatives The Honorable Chairman of the Senate Ways and Means Committee The Honorable Chairman of the House Ways and Means Committee The Honorable Chairman of the Senate Post Audit and Oversight Committee The Honorable Chairman of the House Post Audit and Oversight Committee The Directors of the Legislative Post Audit and Oversight Bureaus The Secretary for Administration and Finance Members of the General Court Omnibus ad quos praesentes literae pervenerint, salutem. I am today releasing a report, mandated by Section 31 1 of Chapter 38 of the Acts of 1 995, that addresses the problem of motor vehicles that are owned by Massachusetts residents who improperly register their motor vehicles in another state or another city or town to evade higher insurance premiums, registration and titling fees, and sales and local motor vehicle excise taxes. During the course of this review, investigators from this Office were able to substantiate that most of the individuals whose motor vehicles were improperly registered out of state, or in another city or town, had made statements of fact that confirmed their residency in Massachusetts. The principal residence of individuals was verified using information contained in public documents in which assertions were made by the motor vehicle owner that established his principal residence in Massachusetts. Most of these documents contained statements that were signed under pains and penalties of perjury and are on-line and readily accessible by computer. My Office has found indications that more extensive tax evasion or fraud can occur when individuals and businesses improperly register their motor vehicles out of state. An individual may disavow Massachusetts residency and register a motor vehicle out of state and at the same time receive a property tax exemption on property in Massachusetts that the owner claims as his principal residence in order to qualify for the abatement. Massachusetts businesses may short-change the State by underreporting business information on tax returns and forms. The Commissioner of Revenue warns income tax filers: "You cannot choose to make your home in one place for the purposes of life and in another for tax purposes." That is clearly the message of this report. have concluded that the common goal of achieving proper registration of motor I vehicles in the Commonwealth cannot be accomplished using the tools for enforcement currently available to State and loca' police. Therefore, have filed I legislation that will provide for a level playing field and curtail the recurring opportunities for improper registration. This legislation will ensure that the Commonwealth and its cities and towns collect the millions of dollars in tax revenues due from these chronic cheaters. urge you to support this legislation that will I establish well defined rules that will govern motor vehicle registration requirements. These requirements to register a motor vehicle in Massachusetts will be directly linked to the owner's own declarations and statements in which Massachusetts residency is established. The bill also requires all motor vehicles operated on Massachusetts roadways to have proof of liability insurance and that leased motor vehicle registrations include the identity of the lessor and lessee. Those who are found guilty of tax fraud associated with improper motor vehicle registrations will be required to relinquish their professional licenses and certificates and pay stiff mandatory fines. To get this program off the ground, have recommended that the Registrar of Motor I Vehicles and the Commissioner of Revenue design and implement a three month amnesty program to allow the scofflaws a brief period of time to comply with the motor vehicle registration and tax laws of the Commonwealth. The State Police units, the North Shore police departments, the Registry of Motor Vehicles, the Department of Revenue, the local assessors in Massachusetts and New Hampshire and the New Hampshire Department of Public Safety provided much insight, cooperation and assistance in this investigative study and all were exceptionally responsive to the needs of my staff. would like to thank Fran Brown, First Assistant Inspector General and Nancy Gordon, I Deputy Chief for Legislative and Public Policy; and Noreen Hazelton, Chief of the Asset Management Division for conducting this investigative study, providing recommendations, and writing this report. Sincerely, Robert A. Cerasoli Inspector General Digitized by the Internet Archive 2014 in https://archive.org/details/studyofimpropermOOmass ....... TABLE of CONTENTS ........ Executive Summary. i ........ Background. 1 ......... Introduction. 4 Findings. 9 .... Information Resources. 16 . . . . . . . ..... Verifying Residency and Business Locations 20 Improper Out-of-State Regi.stra.tions.. ... 26 ..... North Shore Initiatives. 27 .... State Police "Zero Tolerance" Unit 32 ...... Individuals with Questionable Registrations. 37 ...... Business Related Tax Issues. 43 Businesses in Essex County. ... 48 Current Efforts of the Registry of Motor Vehicles. 61 1-800-l-Pay-Tax ... 64 ....... Processing Motor Vehicle Offenses in the Courts. 67 Lawrence District Court. 69 Improper Registration in another Massachusetts Community. 75 . ....... Uninsured Motorists fail to pay $210 Million/Premiums. 78 . . ........ Irresponsible Drivers. 80 ..... The Bounty Law. 84 ...... Registration in New Hampshire. 88 ..... Repair Plate Abuse - Update. 90 Conclusions and Recommendations. 95 Publication No 17885-120-5C-3/97-IGO,approvedby Philmore Anderson III. State Purchasing Agent Printed on recycled paper