According to the Wall Street Journal, financially hard-hit states seeking revenues are taking aim at taxpayers who owe back taxes to their local government, putting state tax codes in the forefront. Below is the full article.
Financially strapped states are getting more aggressive with tax scofflaws, hoping that stepped-up enforcement and the posting of the names of delinquents online will push more people to pay up.
Oklahoma and Ohio are mining Internal Revenue Service data for leads and some tax collectors are cajoling other state agencies to share data about residents. Missouri’s tax agency has asked for the authority to garnish bank accounts to collect tax judgments. And Nebraska lawmakers are preparing to let the state post online the names of hundreds of taxpayers who owe $20,000 or more.
Such efforts are designed to augment states’ efforts to attack budget deficits that are projected to swell to a combined $55.5 billion for the fiscal year beginning July 1, according to the National Conference of State Legislatures. The collection efforts are likely to fill only a fraction of the gap, but state officials say every extra penny of revenue helps.
“When revenues are flush, sometimes—even though it shouldn’t matter—the pressure’s not quite on state taxing agencies to go after those [delinquent] accounts,” said Tony Mastin, Oklahoma’s tax commission administrator.
Across the U.S., individual income taxes and sales taxes account for large parts of state tax collections, so revenue departments tend to focus on those areas in the hunt for unpaid taxes.
The IRS estimated in a July report that about 84% of taxes it oversees are paid voluntarily. States often derive their estimates from the IRS figures. California, for example, says its annual tax gap—the difference between taxes owed and those paid—for individual and business income is about $6.5 billion.
The recession has caused a sharp drop in total state revenue. Although some economic data point to recovery, monthly revenue collections continue to miss scaled-back forecasts. All states but Vermont have at least a limited requirement to balance their budgets, and they have been cutting spending, increasing tax rates and adding fees to eliminate deficits.
The measures have been unpopular with voters, which could pose problems for politicians in a year when 37 governor’s seats are up for election. Collecting more of what taxpayers legally owe is fairer than raising taxes and fees on all residents, state tax commissioners say.
Confusion about state tax codes explains 15% of so-called nonfilers, said Vaughn Lombardo, executive administrator of the tax discovery division in the Ohio Department of Taxation. And a growing portion of delinquents simply can’t afford to pay because of job losses or other recession-related blows, Mr. Lombardo said.
Many of the new state tax-collection efforts involve legal changes that compel agencies to work together, as well as computer upgrades needed to sift through data.
In Georgia, several state legislators—including one campaigning for governor—introduced a bill last month that would require the state’s Department of Revenue to inform counties of businesses that have operating licenses but aren’t paying sales taxes. Proponents have said the measure would raise an extra $1 billion for state and local governments.
Dear mr. Harris my social security check has been garnished 197.00 So I last October hired your company here in boston.The first person helping me for months has left the company. So I got anew team member to take my case over.Since Ive been in your companys stable of clients. The state came in and levied & emptied my checking account. Itercepted a large 3rd party check going to the body shop where my car is still in limbo Im disabled and can’t get around well at all most recently the I R S levied me here in March where my family hired another attorney to have that tax lean removed they did on 3-22-10 same day we talked to them from his office. Now the Company said they had no idea about the stae tax I sent the original person amy Limehouse the paper work but the new people don’t know anything about it. I paid up front to your wonderful company that has helped millions of folks But after hiring another attorney to help expidite this problem. which he had done Explained my disability Mentally & physicaly due to service to my country the I R S designated me unable to resolve and release my levy so i can now receave my 1300.00 check instead of 1000.00 Because I had to pay you at Christmas because without my consent or understanding it was automaticaly taken out s0 I had them taking money and your company taking oct, nov, dec,money We here in my home with to young girls had nothing to celebrate material wise with my children My Wife needless to say has made my life a living hell over it it there is not a day that goes by she does not torcher me over it.Listen my friend I can’t afford what or how your companys handling of this please can someone put a fire under the butts of your attorneys I know your a busy guy but it does say J K HARRIS on my paper work and every check your company cashed and now my family is spending more money that the attorney they hired said this a easy case for him because of my homeless status for so long I never worked before, he said he has had more difficult cases than mine. I don’t want my family saying I told you so. Can you people help me come to a resilution thank you for any assistance I like the people I just need some help They had me make out my 2003 tax and I screwed that up So the tax attorney guy says why didnt they help you with this it should have been resolved two months ago instead of taking 400.00 more out of your check. so far they have taken more than enough. Not to mention all these other actions were taken after I sent your company the warnings that they were to soon levi against me according to my familys attorney they should at least called and headed this off you guys have power of attorney after all. And Where Im totally Disabled He said I R S would have worked with them all they had to do is turn my problem over to them as a Disability person like he did. please can someone help me now the only reason my family got involved and sent me back to V.A.
is because the caught me in the middle of eating a bullet over this whole thing Ive talked to my congressman he called me in the hospital and said after the sacrifices you made for your country he would get involved I did stuff no one wanted to do for my country and I voluntered for it I was homeless for a long time still trying to get on my feet I will make it dispite the break that was dealt me Im in better shape than the guys I fought with Please sir If you can help in any way to expidite anything at all I will sing your praises and pray for your intentions after all Im in the church Daily its the least I can do yours truly Chuck Self 781 913 9022
Dear Charles,
Thank you for taking the time to write and allowing me to answer your questions. We are aware of some of the things you may see about JK Harris on the Internet. We created a website called “JK Harris Uncovered” (Os – please hyperlink to site).
JK Harris is not a scam, I can answer that most assuredly. Our company grew from one client to a large company very quickly and we have had our share of growing pains, as many large companies do. The complaints you see online may come from a variety of sources for a variety of reasons. Have we made mistakes? Yes, and we work hard to try to correct those and to do right by our clients. We want our clients to succeed in resolving their tax problems and we work hard to help them do that. Do our clients file complaints online? Yes they do! Often these complaints come out of a lack of understanding about the process. The IRS offers programs to help taxpayers who have back tax problems, but the taxpayer must be involved in the process. Our clients don’t always understand – the tax problems that took years to accumulate cannot be resolved overnight. Depending on the complexity, their cases may sometimes take years to clear up! Other clients haven’t understood the IRS’ constant demand for updated and recent financial documents. They sometimes think we lose their documents, when in all actuality, we are just doing our jobs. The better the client is at complying with our requests, the better their chance for a successful resolution to their tax problems.
Have our competitors launched Internet campaigns against us to attempt to damage our reputation? They have – some have posed as “former clients” and have posted false complaints against us, while others have used our trademarked name to attempt to sway customers away from doing business with us. When you are the largest company in any industry, you tend to be a target. I hope this helps to answer your question.
Sincerely, JK Harris