The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-04-15
HUGE UTILITY
TAX EVASION
IS CHARGED
Action Of State Board in
SIashing Valuations Is
Played by KiVett.
TOWNSHIP FILES SUIT
Attorney Starts Battle to
Recover Millions in
Lost Revenue.
BY BEN STERN
BY BEN STERN

Searching inquiry into reasons for
action of the state tax board, over
a six-year period, in slashing $47,-
41s.816 from the admitted tax valu-
alton of the Indiana Electric Cor
poration, an insult holding, was
being conducted today by S, ".
Kivett, Martinsville attorney.
These arbitrary reductions by
the state tax board have resulted
in loss OF hundreds of thousands
OF dollars in revenue to the various
taxing units in which the company
operates" Kiyett charges.
He has been retained by Perry
township authorities to institute
suits TO regain the revenue which
is charged has been lost by the tax
boards reductions, not only in
valuation of the electric corpora
ton, but other utilities having
property in the township.
Suit Is Filed
AS FIRST step in Perry townships
fight to regain the revenue, Kivett
has filed suit in superior court two
to obtain $4,000 in back taxes plus
interest, which, he charges, was lost
through fraud"
The suit AYERS the utility and tax
board did not follow the law in fix
ing appraisals.
The statutes, according to the
suit provide that a utility must
make an annual report to the board.
This return is supposed to set out
the amount Of the corporations
capital stock, both common and
preferred, authorized and out
standing.
In addition, the true cash value
OF the stock and the real estate,
structures, machinery, fixtures and
equipment also are supposed to be
enumerated.
Must Show indebtedness
The return also is to list the name
and value of each franchise and
privilege, owned by the utility and
further is required to show the total
amount of Indebtedness, including
mortgages.
These then are added and deduc-
tons made for the amount of real
property tax already assessed in
each taxing unit. Remainder is
evaluated and apportioned to the
units in proportion to the extent of
the company's tangible property
within its boundaries.
Kivett charges the utility did not
state it's true valuation in the re-
port. He alleges amount of mort
cages was not written into the re-
turn and, instead of showing for
deduction purposes, the assessed
valuation of the real property, a
book value, which was a larger
figure, instead was given.
Fraud Is Alleged
This, he charges, is fraud.
Kivett cites this alleged example
in his suit.
In. 1928, the utility's real prop
erty had an assessed valuation for
taxation of $2,251,430. Instead of
subtracting this figure, the COM
pany'S officials wrote in the book
value, which they fixed at $3,957 1923,
which was $1,7o6,398 more than the
amount really paid upon.
Total of increased deductions
obtained by this method alone over
six-year period was Sl2,043,0l9,
Kivett charges.
He also asserts for mo known
reason" the tax board arbitrarily
reduced the valuation for taxation
admitted by the utility, which, XII
vett charges. was millions less than
its real value for taxation and
much less for rate making purposes.
Tabulation Is Given
Tabulation in the six-year period
from 1926 through 1881 reveals the
company admitted a total valuation
Of $S8,506,766, which, Kivett SAYS,
was millions too low, and the tax
board reduced this total to SAL
067,950.
This is a total reduction of SAT-
4l8,Sl6. The company's figures were
millions lower than would be found
by investigation, he AYERS.
The financial outlay, as taken
from the company's admitted VAL
uation, the figure set by the board
and the loss to the state, follows:
Valuation by Valuation BY
Company, Board. Reduction