I was holding off on posting this due to my 'vacation' and the fact that I (wrongly) assumed that the art blog world would be all over this juicy and totally irrelevent one;
As gawker noted secondary market biggie Thea Westreich (and her husband) have been nailed by the IRS for $749,892 in uncollected sales tax and fines. They were using the old 'empty box' trick, which if you are not up on your tax cheating schemes involves selling an expensive piece of art to someone in state but then shipping an empty box to one of that customers out of state residences (no state sales tax on items sold out of state (interstate commerce clause)). The Westriech's were also using their company's resale number to make personal purchases without paying sales tax.
What I don't understand is how you get popped for this. It seems like one were to just turn down the arrogance meter a notch or two, you could be bright enough to get away with this scam. If you were to actually ship the art out of state, and then the customer did with it what s/he pleased you are pretty much off the hook- it's not like this is the first time a dealer has been busted for this...
Posted by thickeye at July 27, 2004 03:50 PM