Sandoval asks judge to move IGT case

Brendan Riley

Tuesday, Jan. 27, 2004 | 11:03 a.m.

CARSON CITY -- Nevada's attorney general moved Monday to dismiss a whistleblower's complaint that International Game Technology filed false state tax returns and could owe the state up to $30 million in back taxes.

Attorney General Brian Sandoval filed a dismissal motion with Washoe District Judge Steven Kosach, saying the Nevada Tax Commission rather than the court is the proper forum for resolving the tax dispute.

Assistant Attorney General Ann Wilkinson, who wrote the motion, said the state Taxation Department already is conducting an audit of Reno-based IGT for a three-year period running through March 2003. Once done, that audit goes to the Tax Commission.

Jim McAndrews, a former Taxation Department auditor, used the state's False Claims Act to accuse IGT after being hired by the firm to oversee its sales and use tax compliance. But Wilkinson said Kosach shouldn't let McAndrews "usurp" the Tax Commission's role in such matters.

Wilkinson also said that by relying on the False Claims Act, there's no audit procedure or way to keep financial details confidential. She said the act "creates a process that potentially circumvents the Taxpayer's Bill of Rights."

John Bartlett, the attorney for McAndrews who plans to challenge the state's dismissal motion, said the attorney general's office "basically is saying that they don't care that IGT owes $20 million to $30 million. The only tax collector is the Department of Taxation, and if they can't collect it nobody can."

Bartlett also said that if the dismissal motion is granted, McAndrews, placed on administrative leave by IGT, wouldn't be entitled to a percentage of any money that might be collected from IGT. Under the false claims act, he'd be entitled to up to half of anything collected.

Ed Rogich, IGT vice president of marketing, said the company is studying the state's dismissal motion. He declined to say whether IGT would support it, saying the legal case is still pending.

Rogich also reaffirmed his earlier remark that it's the opinion of IGT's internal auditors' and third-party external auditors "that we have no tax liability."