|Progress Being Made on Delinquent City Taxes|
|Written by Nancy Bowman|
|Wednesday, 25 September 2013 00:00|
The city income tax department is making progress in its initial steps of pursuing delinquent taxpayers.
The work got under way this summer following City Council’s vote in February to update the income tax ordinance and adopt an income tax collection policy.
Those changes followed a review of income tax department operations sparked by citizen questioning last year of city tax department handling of income tax returns and delinquent accounts. Clark, Schaefer, Hackett & Co. of Springfield, hired to review income tax operations, made a series of recommendations, including a more concerted tax collection monitoring and enforcement system.
City Manager Jon Crusey and City Auditor John Green updated council on the department’s work so far during a Sept. 16 work session. Green also told council about exploration of online filing and payment systems.
Green said the staff is “still scrubbing” the some 5,500 existing accounts and making attempts to collect taxes the department knows are owed to the city.
All active business accounts have been reviewed, with 30 identified as having delinquent tax returns. About one half of the individual tax accounts have been reviewed.
The city has sent out several hundred letters seeking taxpayer information and/or payment. By the end of July, three court cases were resolved with either payment or payment arrangements and 13 delinquent returns filed. Those actions identified $9,418 in taxes, penalties and interest owed, with $2,443 paid and arrangements made to pay the balance.
By the end of August, 57 administrative subpoenas telling account holders to appear at the Government Center with tax records on a specified date and time had been issued and 63 final notices sent. The result was $10,005 in payment of taxes, penalties and interest and 35 payment plans with balance of $31,792.
The city also had charges ready to file on five more accounts for failure to file and/or failure to pay, Green said.
“We are pursuing folks,” he said.
During discussion of a focus on identifying and collecting taxes, the possibility of an amnesty program was discussed.
Green said last week that an amnesty program would not be a given, but could be used in special circumstances to encourage compliance.
“We’ve spent most of the (2013) summer auditing old accounts and working to clean up what is currently in the system. I would not anticipate an amnesty program to be considered until we complete our initial scrubbing of the accounts and have attempted collections on what we know is owed to the city,” he said. “I envision our first amnesty program to help identify those accounts which we currently have no knowledge of, not necessarily an incentive for those accounts who have failed to pay known balances.”
In a related matter, Green said meetings were held recently with two vendors of online income tax filing and online payment systems.
Today, about one half of the returns the city receives have a math error or documentation error that requires sending the paperwork back to the filer, sometimes more than once.
An electronic system could check the math and reduce the number of returns sent back to filers, Green said.
Although many larger communities have the electronic filing systems, Tipp City would be an early implementer for communities of its size if it decides to move forward with an electronic system, Green said.