Innovative enforcement of Indiana's tax evasion laws has put the state at the forefront of "puppy protection."

Andrew Swain, head of the Indiana Attorney General's Revenue Division, is being lauded for coming up with the idea of using tax statutes to shut down unlicensed, commercial dog-breeding operations that put profits before animal welfare.   

Swain's boss, Indiana Attorney General Greg Zoeller, says the closing of squalid puppy mills is a bonus. What really motivated him was going after tax cheats, a category he and Swain believe applies to some of the state's commercial dog breeders.

Why the tax suspicion? Because many dog breeding operators deal in cash-and-carry transactions on which they allegedly fail to pay income and sales taxes.

The tax enforcement process is relatively simple. The state files a "jeopardy tax assessment" in state court, alleging the breeder owes delinquent income and sales taxes.  The state then seizes the breeders' taxable assets, i.e., puppies and dogs.

The most recent tax crackdown came earlier this month, when an unlicensed dog breeding operation in Bloomfield, Ind., was charged with allegedly failing to pay $311,000 in taxes. After its doors were closed, the state took custody of 120 animals.

The Indiana AG has filed two similar cases over the last couple of years. Those resulted in guilty pleas to various tax charges and the seizure of more than 300 dogs.

In each case, the Humane Society has worked with Indiana officials find adoptive homes for the dogs.

Although unpaid dog breeder taxes aren't the biggest fiscal problems facing Indiana, at an end-of-year media briefing last week Zoeller pledged to keep up the tax and animal welfare crackdown. He also promised to use state tax-evasion laws to go after other off-the-book businesses.

"We reserve the right to see if you've scammed the taxpayers," Zoeller said.

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