The New York Times

May 23, 1988

TAXING LESSON AT YONKERS MARKET

Armed with guns and pages from the New York State Tax Law, a team of undercover agents swept through the Yonkers Raceway Flea Market today to demonstrate that tax evasion does not pay.

The agents, striding through the market like sheriffs hunting down outlaws in the Wild West, wrote out citations, issued warnings and commandeered property, in the name of the law that requires flea market vendors to charge sales tax and turn it over to the state. 'No One Is Escapable'

''This shows that no one is escapable from the reaches of the tax department,'' said Michael G. Kessler, chief of tax investigations for the State Department of Taxation and Finance, who was known as Ranger One for purposes of walkie-talkie communication during the operation.

Several vendors said they did not understand the sales tax law and had not violated it, anyway.

Barry Klein, the genial owner of Mr. Pillow, a linens business, was asked why he did not have the required certificate of authority to charge sales tax. He had been given a form to apply for the certificate the week before, an agent pointed out.

''What certificate?'' Mr. Klein said. ''What happened is that I can't find it.''

''Okay,'' said Gary Zweibach, a tax compliance officer. ''You'll be issued a summons today.''

''Now I remember,'' Mr. Klein said. ''The gentleman who was here last week gave me a sealed envelope and told me to mail it. I was very confused by the sealed envelope. I didn't know whether I was supposed to open it or mail it.''

Embarrassing Code Name

Last week, investigators surveyed about 300 merchants in the market, behind Yonkers Raceway, and notified some that they lacked correct sales-tax documents. The violators were given forms and told that if they filled them out and began charging tax they would not face any penalties. Today's action was aimed at those who had not done so.

At the end of the day, 21 citations had been issued. Each required a court appearance and carried the possibility of a $1,000 fine and a jail term, said a spokesman for the tax department, Paul Rickert.

Yonkers Raceway was the fifth flea market to have felt the impact of Operation Flea Collar. The name is a bit of an embarrassment to the people carrying it out. ''The public relations department thought the name up,'' one agent said.

''We usually do major undercover operations,'' said another agent, wondering aloud why he was spending Sunday morning in a flea market, holding a fistful of summonses. ''We did the Helmsleys and some of the stockbrokers.'' Operation Flea Collar will be extended to flea markets in upstate New York, the agents said. No Small Problem Tax evasion by flea-market merchants is no small problem. The Retail Council, a merchants' lobbying group, estimates that flea-market merchants in New York State evade $100 million in sales tax every year. ''We have found that flea markets are a hotbed of noncompliance of New York State's tax laws,'' Mr. Rickert said.

Today's operation met with some resistance from the vendors.

One of first to be questioned was Michael Weitz, a clothing merchant who turned out to be not guilty of anything. Mr. Weitz, in fact, seemed pleased to see actual, breathing tax agents, because he had a few things to get off his chest.

''Why, when you write to Albany, does the letter always get lost?'' he asked, as the agents tried to move to the next booth. ''And why, when you call, do they put you on hold for 20 minutes and then hang up?''

Clothing Seized

Late in the morning, agents seized the merchandise of a clothing vendor whose husband, they said, owed $24,000 in back sales tax.

One agent began stringing up orange rope around the booth. Another began putting up signs saying ''SEIZED.'' A third chased shoppers away. ''Excuse me, ladies, this shop is closed right now,'' he said, wresting a shirt from a woman who was asking its price.

A crowd gathered and engaged in a brief impromptu debate about taxation and confiscation.

''It's the guy's own fault; he should have paid,'' said one man to another.

''They're the Gestapo,'' his companion replied. ''They must have the whole tax department out here.'' ''Of course, I don't pay taxes either,'' said the first.

A passer-by, Dorothy Angelico, looked on with concern as the agents removed the clothing, to hold until the back taxes were paid. ''I don't like to see anything like that happen to anyone,'' she said. ''I'm Mrs. Softy, I guess.''

Author - Sarah Lyall