New California Bill Seeks to Crack Down on Underground Economy


[Photo by Jericho via Wikimedia Commons]

Press release from the California Attorney General:

California Attorney General Xavier Becerra today unveiled legislation to combat California’s growing underground economy. Senate Bill 1272 would permanently establish the Tax Recovery and Criminal Enforcement (TRaCE) Task Force within the California Department of Justice, and expand the program with permanent Task Force teams in every major metropolitan region across the State: Sacramento, Los Angeles, San Diego, the Bay Area, and Fresno. The bill is sponsored by Attorney General Becerra and was introduced by Senator Cathleen Galgiani, along with Senate President pro Tem Toni Atkins and Assemblymember Joaquin Arambula.

The legislation aims to ensure multi-agency collaboration between several governmental entities, including the California Department of Justice, Department of Tax and Fee Administration, Franchise Tax Board, and Employment Development Department, to combat wage theft, tax evasion and other crimes in the underground economy.

“Here in California, home to the world’s sixth-largest economy, every worker who powers this engine deserves rights at work, every upstanding business owner deserves a fair market, and every taxpayer deserves to see their hard-earned money used to fund vital services,” said Attorney General Becerra. “If you work hard and play by the rules, you should be able to get ahead. This legislation would provide the resources needed to enforce the law and protect the pocketbook of every hard working Californian.”

“The underground economy results in significant uncollected revenues that are desperately needed to fund basic government services. The TRaCE Task Force, operating as a pilot program, has recovered millions of dollars in lost tax revenue for the state. I’d like to thank the agents for their rigorous work investigating and prosecuting the most egregious felony-level underground economic crimes in the state,” said Senator Galgiani. “Given the persistent and significant negative effects of the underground economy, I introduced SB 1272, sponsored by Attorney General Becerra, to strengthen the statewide efforts to combat the underground economy by permanently establishing this vital program with law enforcement teams in every major metropolitan region in the state. ”

According to a 2013 University of California Los Angeles Labor Center report, the state’s underground economy is estimated at $60 to $140 billion annually, depriving the state of $8.5 billion in corporate, personal, and sales and use taxes each year. TRaCE’s pilot program, created in 2014, provided for interagency collaboration, and the agencies together set out to investigate and prosecute the most outrageous felony-level multijurisdictional underground economic crimes in California. Since its start, TRaCE’s teams have identified more than $210 million in unreported gross receipts and $46 million in associated tax loss to the state. Additionally, through its criminal enforcement actions, the pilot program recovered millions of dollars in lost tax revenue for the state.

The proposed legislation would provide significant support to the TRaCE Task Force, enabling the California Department of Justice, together with our state partners, to combat the wage theft, risks to public health and safety, and tax losses in the underground economy.



  • Becerra is a piece of shite.
    Deal with the illegals asshole.

  • Veteran's Friend

    How amusing. If you work hard & play by the rules, you SHOULD be able to get ahead.
    But 50% of us are a paycheck away from being homeless. Who can afford to purchase a home in a state where a normal house costs a million dollars?
    The rules work fine if you are a millionaire. For the rest of us, not so much.

    • Taurus Ballzhoff

      You always *$$!!##$%%^&*(##@@@ exaggerate! Move to Yuba City, average home only about $350,000. Or %&(*#^&!@@@((!! Sacramento! Redding! You can still grow your pot, it’s legal now!


        350k is still pretty high,especially when a homeowner that improves the property pays annual property taxes,and the renting neighbor with multiple kids wrecking the place,gets tbat money in welfare. Then has another kid.

  • So what else is new? How many times have you heard some government lacky say.

    “You are not paying your fair share.”
    “You owe us more money.”
    “You are causing all the problems around here.”
    ” I deserve my pension.”
    “I’m a government official.”

    “I predict future happiness for Americans, if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.”
    ― Thomas Jefferson

    • How many times have you heard a grower say they are not going be legal? How many hire illegals?

      But with California being what it is these days, I suspect the legislation really should be named the Protection of Undocumented Workers or PUW.

      • Illegals pay taxes and they cannot collect taxes at the end of the year. How is this PUW?

        • Illegal frequently don’t pay any tax other than sales tax. Just like they drive without insurance. Even worse their more unscrupulous employers withhold taxes from their pay (when it’s not all under the table and no one pays anything) and don’t send the money in.

          As for getting nothing back, I suppose you mean Social Security. Well Social Security does have lots of ways of “recondstructing” earnings and paying people when they become legal even where no one has paid the taxes. The employer is liable for both his and the employees taxes but they are long gone so no one ever pays them.

  • Using the police to tax the poor. Disgusting.

  • Price of pot is the same at the consumer level (higher for marketed BS), whereas employees, employers and businesses in their locality are making significantly less. Period.

    Who’s actually making more money? Humboldt County’s board of supervisors voted themselves a raise last year. Nuff said.

  • the CA SBOE is already corrupt. It sounds like they just want more excuses for property seizures, as a form a restitution as they see fit.

    Last I heard the CA SBOE was under federal investigation for over stepping its legal boundaries among other things.

    As it sits the SBOE comes after you, there is no way of getting out of a fine, even if they are in the wrong they will slap you with something still.

  • Elric of Melniboné

    The Bill as currently written, would be a Non-State-Mandated Local Program. If enacted, it would require teams located in Sacramento, Los Angeles, San Diego, the San Francisco Bay area, and Fresno. It would seek to expand into other metropolitan areas.

    Text of the bill here.

  • Nothing against folks maybe not paying the full amount on what they make but the vile dope growers around here who have been dodging tax on their vast income then have the chutzpah to collect welfare must be stopped. Lots of the parents at the school my kid goes to make an absolute fortune, driving round in their fancy yotas and off on vaycay 4 months a year but somehow qualify for free childcare, medi cal, discount power , food stamps and their kids even qualify for free school lunches. Mr green thumb off heliskiing , surfing, hunting, while mrs green thumb spends her day going to yoga and wildberries , quaffing fancy coffee with her lazy friends.Go get em Mr taxman!

  • Not helping taxpayers, that's for sure

    “institutionalizing collaboration among state agencies and reduce barriers for information sharing related to investigations involving felony criminal tax evasion and other underground economic criminal activity”

    The bill seeks to create an easier reach in multi-agency operations. Basically they are removing the bureaucratic “walls” and instead creating a vacuum through all these departments, different places where you might have records, and allowing agency sharing to minimize the (subpoena) time needed to come up with evidence against you. Wish it was the other way around.

  • Ban cash. Only criminals are afraid of electronic economies.

    • Hermit of Livry

      Only Beast worshipers want to do away with cash. “And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.” Revelation 13:17

      Considering that the governor is a Roman Catholic seminarian, and the supreme court is stacked with Roman Catholics, we are probably not that far off.

  • Yes, the illegal pot industry is huge, but the use of illegals, mostly from Mexico, in service industries, eclipses pot. Go after the hotels, eateries, etc. for hiring the illegals and paying them under the table (or with fake documentation), not paying employment taxes, social security, etc.


    So does that mean if everyone paid,all taxes would go down? Nah.

    But maybe the octo-moms around here would get even more benefits while “home-schooling” their little rats that run around during school hours .

    • “Octo-moms”? What the heck is an “Octo-mom”?


        Lol.It’s a woman who has more kids than she can take care of,and keeps having them.


        It’s a job,having kids and getting fatter gov’t checks with each baby that they can’t afford. But keep having them because the taxpayers are paying.

        • Nobody should be having kids that they cannot support on their own. If you leave your kid in the car these days for 10 minutes when you run into the market you get labeled a child abuser. How about the people having 5 plus offspring yet they can’t even take care of themselves. Seems to me that sterilization as a prerequisite to government assistance seems a logical start.

          • Aside from the fact that there’s a LAW AGAINST IT,[edit]

            • Well maybe it should be repealed or changed. Do you really think we should support people making such irresponsible decisions as having kids that they cannot properly care for? Sorry I am late to the party and missed what the edit was. Would love to know what you were trying to call me…


    Getting gov’t benefits is an underground economy that should be scrutinized.
    Then taxpayers woujdn’t foot the bill for the hippie buying organic toilet paper at the co-op WITH FOOD STAMPS!

    Gov’t gets hustled,so they pass the buck even farther,lots of illegals getting these benefits that never paid a penny in the pot.

    • Didn’t happen. Why do you keep telling your lie. ?? You can’t buy non food items with ” food stamps”. And the “stamps” are now a debit card, you would not even be able to tell if someone was using one. [edit]


    Any money they find will just go to:

    “expand the program with permanent Task Force teams in every major metropolitan region across the State”

    Sounds expensive and wasteful to do.

    Unless you’re getting offered a gov’t job with benefits while everyone else is getting their healthcare and raises eliminated….then it probably sounds awesome.

  • Kym, how can you stand reading your own blog’s comments? It would be a net gain for humanity to just shut it all down and let the unhappy people find another venue to spew their venom. You’re probably the only one who has to read all the vicious stupid comments–I pity you.
    (Haven’t been here in awhile, seems like it’s just getting worse. Yeah, free speech, wonderful.)

    • Go take a look at the verbal sewage on the other local news blog. God those people over there love to listen to themselves spew.

    • Always baffles me why people read something and then complain that they don’t like what they saw. If the comments are not to your liking why not just read the article and then don’t scroll down any further or close the webpage? Maybe you are new to the internet, but this site is pretty tame compared to most out there. Free speech ain’t always free. I would much rather live in a world where I can voluntarily choose to read something that I might not agree with over one in which people are not allowed to voice their opinions, no matter if I agree with them or not.

  • Timothy McVeigh's ghost

    hungry government
    wants what’s owed
    trying To find it down the rabbit hole

    Raising taxes
    Run them out
    Have you no idea what greens about?

    Save our state 187
    voted in to stop an invasion
    Men in Black tossed it out
    made a vote never count

    Kalifornia king of greed
    Nothing to do with your crappy weed
    It’s got you too by that ring your nose
    oh you thought you were one of the bros?

    boots pressed hard against your throat
    nothing funny about this joke
    hungry government wants its take
    bend over now goodness sake

  • I know an out of business landscaper with 26 employees unable to compete with businesses that paid no SS, Workpersons Comp, taxes and etc. Two big questions are how he ever could be compensated and how the AG could collect all due from his illegal competition.

  • Becerra, your talk needs to be with the governor. He keeps raising fuel taxes, registration fees and every other thing he can squeeze money from people. The only way a working person (not pot) can survive in California is to cheat as much as you can. ALL the politicians do it, so why not the hard working citizen. Make California affordable, and people will support this over taxing state.

  • Following Donald Trump lying has become a national right of Gov't elected officials!!

    What specifically is defined as an underground economy. The Bill doesn’t say. Is Trump spending millions of tax dollars playing golf every weekend and underground economy? Is that not welfare? Is the wine industry using free water from the Eel River without that being taxed underground economy? That is public water and my water is metered. Why not the wine industry? Is it no wonder why Sacramento didn’t publish a list of the underground economy? In the valley Mexican family’s work thinning sugar beets. Moms, dads, children, grandparents and they are only paid one minimum hourly wage. Next time you buy five pounds of sugar think about how and where it came from and who worked in the hot sun helping the sugar beets grow. Rule of thumb; if the Gov’t doesn’t publish the whos then they are covering up something.

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