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The math is irresistible. On one side of the ledger there's the $562 million hole that the state is facing this year, combined with the looming $2-plus billion chasm in the next biennium — budget gaps serious enough that the governor has called for 9 percent across-the-board cuts to all state agencies. On the other side of the ledger is a similarly huge number — about $2 billion — that's owed to the state by various tax evaders, fee avoiders, fine ignorers, and general scofflaws. Why not just collect that $2 billion, the thinking goes, and solve most of our massive budget problems overnight? If only it were that easy.
Some of the taxes are owed by companies that no longer exist. Some of the fines are owed by incarcerated felons who have no assets or income. And sometimes the tax liabilities are erased by bankruptcy.
The state's Department of Revenue has argued that they could benefit from newer technology to better find and target the debtors who actually have money in their pockets. But given the current budget mess, expensive new computers might not be coming any time soon. And looking more broadly, how much less money can you collect if you have 10 percent less money to spend to collect it?
Desperate times call for desperate measures, and some people are pushing for Oregon to publish the names of the most egregious tax cheats. Washington already does it, as does California. Another possibility is to loosen restrictions on private collection agencies working for the state.
Are there other ways the state could collect the various monies that are owed it?
Do you owe the state money — for income taxes, speeding tickets, or court-ordered payments? What's preventing you from paying? What would convince you to pay?
GUESTS
- Derek Gasparini: Communications manager for Oregon's Department of Revenue
- Tim Mabry: Owner and manager, Credits Incorporated
- Ginny Burdick: State Senator (D-Portland) and chair, Senate Finance and Revenue Committee
- Mike Gowrylow: Communications director for Washington’s Department of Revenue
Tagged as: income tax · revenue
Photo credit: alancleaver_2000 / Creative Commons
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On the other hand...I might be more willing to "repay" this so-called debt if the state were to provide some REAL help with securing employment...instead of handing out referrals and saying "good luck...you're on your own from here." If the state actually did some screening and placement, that would be more of a help than what they do.
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There are out of state companys who have employees living in the state of washington who do not withhold any Oregon income Taxes for employees working in the State of oregon !!!!!
These employees make over $100,000 and have paid no Oregon Taxes in 20-30 years
There is no reward for turning in tax frauds !!!!
The fact is Oregon does not care about finding Tax frauds !!!!!
Do not use my name,,,, thank you
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The last time we looked, we couldn't even find a way to report tax fraud on the Oregon Department of Revenue website. We could find iton the IRS website - with some chance of reward, and on the websites of several other states.
Tax Fairness Oregon has been pushing, with some success, for better tax enforcement for some time. The Department itself says we don't collect $1.2 billion a year which is due. Using their figures, they fail to get returns from some 300,00 to 400,000 Oregonians who owe taxes.
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Another option that has not been talked about is to immediately suspend some of the tax credits that do not have contractual arrangements. The entire tax credit or tax expediture level has gradually added up, especially during Republican control so the listing is about the same size as the state general fund.
Not collecting taxes because of a credit is harming us all. Cuts will hurt everyone so shouldn't those getting credits against their income take a hit as well as those who are struggling on unemployment and can't find a job, state and county services to some of those same Oregonians who are having a hard time.
At a minimum those credits that are being sold only to offset taxes should be looked at. Some credits are sold to provide services to the community so just cutting accross the board is not a good idea.
I realize this doesn't directly relate to those who owe the state except for the fact they would owe the state money if they didn't have the credit.
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It would help the state/county/municipal budgets if they (cities etc.) would not use tax waivers to attract businesses in the fahion that Eugene lured in Hyundai/Hynix, only to have them cut and run when the tax waiver expires, as Hynix did.
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In the early 2000s, I worked for the Department of Revenue, collection "un-paid taxes." With more than 30 years in the financial industry, at that time, I was appalled by the way the Personal Tax and Compliance Department was run.
First, if anyone did not file a tax return, even if they'd had adequate taxes withheld from their pay checks. Many, many times when the delinquent returns were filed, refunds were due the tax payers.
Also, when personal taxes are assessed, those amounts are added to the State's assets figures...moneys due the State. Any business owner can tell you that long term unpaid debts, are not an asset, but are almost always charged off as bad debts.
I shudder at the thought that privately owned collection agencies are also benefiting from what might be unjustly assessed taxes. They have no power to correct filing or assessment errors, and indeed, have a vested interest in not resolving those cases where error have occured.
I have memories of many, many cases where people lived in fear of dealing with Dept of Revenue. Taxes assessed on young children, deceased people and obvious cases of identity theft, all came across my desk. And management at DoR was only interested in "getting those numbers up."
I am grateful that I no longer work there.
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First off, you ask what could make collecting state funds owed easier? The state could start by being completely transparent in their assessments and in their fee/fine schedules. In addition, prompt, COURTEOUS service when dealing with taxpayers who may owe the state would go a long way towards compliance. Lastly, when the state is owed money, the state wants its money and has the resources to collect. If the state cannot or will not be paid in what they deem to be a timely fasion, they can add penalty fees and interest. When the state owes a taxpayer money, they drag their feet and pay when they are good and ready and not one day sooner. The affected taxpayer--who is just as likely to be experiencing a deficit of their own and in need of that money--cannot tack on late fees, penalties, or interest.
After an accident and months of health issues, we overlooked our filing extension deadline and the state assessed our taxes on a refund that they "prepared." Although taxes had been withheld from my spouse's pay checks, we were assessed with an additional $1200 in taxes, penalties, and interest at a time when we were struggling to pay rent and feed out family. We paid as best we could, but the phone calls and letters were incessant. And the customer service was not one of mutual respect and understanding.
We paid that debt off and this year, we found ourselves--happily--on the side owed by the state. After preparing our taxes, we found that we OVERPAID the state of Oregon $4700. We filed prior to the deadline. Four weeks after filing, we read online (DOR's Check Your Refund) that our return was being manually reviewed. Two weeks after that, we get a letter from DOR saying, "things look different." Well, duh, we are no longer Oregon residents. My husband had overlooked updating his W-4, so the W-2 reflected Oregon as the state of residence. We provided all the supporting information required and now we cannot find anyone who will verify receipt of our information (faxed and followed up with hard copies), phone calls requesting an update are not returned, and we are still out $4700 on top of having to pay $4100 to the state in which we reside. Where is the parity?
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"... We provided all the supporting information required and now we cannot find anyone who will verify receipt of our information (faxed and followed up with hard copies), phone calls requesting an update are not returned, and we are still out $4700..." -- geddycorn
Sorta reinforces the importance of sending anything that is going to the state, especially ODoR, via Registered Mail, Return Receipt Requested, huh?
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I do not blame you for your aggravation one bit...I, too, am rather unhappy with our State Masters.
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We ended up in Oregon on military orders. At the time, I was the only income earner in our household, being the active duty member.
Military members are exempt from state income tax as they are considered residents of the states in which they enlisted, in my case, Texas. The first year that my spouse earned income in Oregon, we filed a joint return with the state of Oregon. Our taxes seemed very high--in fact, higher than our federal responsibility. We called DOR to question their assessment. In a nutshell, this is how we were assessed:
We were told that I was not taxed because I was active duty.
I earned roughly $50k that year.
My spouse earned roughly $35K for the part of the year that he worked.
My spouse was taxed at the rate of our combined income bracket, at $85K. The DOR rep told us that my income, "had not been touched." When asked why OR taxes weren't based on the $35K earned in Oregon, we were told that taxes were based on the household earnings, but no money was taken from the active duty member's pay.
Seems to me this is double speak. If taxes are 10% (for simplicity's sake) and I earn $200 and my spouse earns $100, but I am tax exempt, then we should be taxed $10 based on the resident's income. However, if you tax the resident at the household earning level and supposedly leave the AD member's pay untouched, then the resident is now taxed as though he earned $300 would have to pay $30.
If my AD nonresident income were subject to taxes, I would also be liable for 10% or $20 of my pay. If my spouse and I filed jointly, we would be assessed at the $300 tax bracket and assessed $30 at 10%.
So, it seems to me that the State of Oregon engaged in a sleight of hand or mathematical prestidigitation. They did this to us every year of my active duty service in this state despite my being a Texas resident the entire time.
When I asked around, everyone, from the rep at H&R block to the state employees, to a friend who had served in the legislature, to the shipmates at my unit, they all said the same thing. "That's just the way they do it."
If this is truly the "way they do it," how long has the state been fleecing nonresident active duty military members and their families and what will they do to compensate for their overzealous taxing measures?
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In the past the Department of Revenue as fought efforts to use web posting to get delinquent taxpayers to pay up. Perhaps they no longer will. My data on this is fairly old, as we pushed for web postings during two legislative sessions and got nowhere. I've not updated that data since 2006 or 7 but back then over 20 states listed delinquent taxpayers on their websites. From a fact sheet Tax Fairness Oregon prepared back then:
1) Web listings are highly productive. For virtually no cost, they collect otherwise uncollectable tax debt, from individuals and companies who, under the threat of being listed, pay up to keep their names off the list.
ü Georgia -- $300,000 in their first six weeks
ü Colorado -- $7.5 million in their first 16 months
ü Connecticut -- $161 million over seven years
ü Maryland -- $10.5 million over four years
ü Illinois -- began March 1, 2005 and collected $590,000 from 89 taxpayers before the first list was posted!
ü Wisconsin -- $9.7 million in the first five months
2) All states post the delinquency lists not on a separate website, but on the tax department’s website, where the threat of being seen is greatest and the cost of maintenance is least.
3) They list only taxpayer information that is already public information—those with tax liens. As this is already a matter of public record, there is no risk to the state.
4) They list businesses, business owners, and corporate officers, as well as individual taxpayers.
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The problem with Tax Fairness Oregon's "public humiliation" method is that those who are innocent may be unjustly vilified. Oregon and Federal tax systems are opaque, complex, fraught with human error, incompetence, indifference or corruption.
It's too easy for an individual to be placed on the Internet, but it can be extremely difficult for them to be removed. The whole system has to work correctly most times it doesn't.
How about reforming the tax system so it is easier to pay the right amount of taxes without all the complexity of current tax laws?
If I had earned income I could pay taxes. How about a job?
Anybody need a cynical, ascerbic, but caring and careful technical writer, IT type? I work hard. I'm honest. At times I'm imaginative but I tend to scuba to my own drummer. I've done a lot of different things and seek to do more with enlightened folk. I'd like to work in Antarctica for a clip, for example. Forgot to visit Antarctica last time I was in New Zealand.
If you seek a wage slave to work in your machine without complaint I'm not your cup of tea. Enlightenment, collaboration, cooperation, justice, honesty and integrity is what I care about. Fair pay for work provided works wonders.
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The state has screwed me time and again, and now they are trying to tell me that I have to re-pay some $3000 I received in unemployment funds. I am very reluctant to pay this, as I know what will happen the next time I try to ask for any help from a state that my partner and I have paid Thou$sand$ of dollars in income taxes to. (Yep, you guessed it -- the state will likely screw me again -- and I likely will derive no 'pleasure' from it.)