State Auditor Doug Hoffer has launched a study to help determine if the state of Vermont could do a better job collecting delinquent taxes.
Last year, the state failed to receive $77 million in uncollected personal income taxes, and Hoffer says this number is growing.
In 2014, the state of Vermont was owed almost $100 million in unpaid personal income taxes, and the Tax Department was able to collect roughly $19 million from these delinquent taxpayers.
Hoffer wants to know if the state can do a better job. He's launched a performance audit to assess the effectiveness of the Tax Department's efforts.
He says it's becoming a serious issue, because the total amount of unpaid taxes is going up at a time when collections are lagging.
"Even though the department has adopted some new policies and has some new hardware and software – and it's a big gap and at a time when the state is looking for money under rocks – I'm sure everybody would be grateful if together we could find a way to collect some more of that money,” Hoffer says.
Hoffer says he understands that the state will never be able to collect some of this delinquent tax money.
"Over time, like any other business that has trouble collecting, you've got to write some of it off. The question is when, and under what circumstances? Have they left the state, or died, whatever? There are a million reasons."
"Even though the department has adopted some new policies and has some new hardware and software ... I'm sure everybody would be grateful if together we could find a way to collect some more of that money." - State Auditor Doug Hoffer
Greg Mosley, Vermont's deputy tax commissioner, says he welcomes the results of the audit because the state is upgrading its delinquent personal income tax program.
"It's perfect timing for us to look at those findings and actually take action on them pretty quickly,” Mosley says, adding that he's optimistic that the Tax Department will be able to reduce its delinquent tax base in the coming year.
"The Legislature has also given us some ability to try new collection techniques. So we're experimenting with that this summer and fall,” Mosley says. “Last year there was a top 100 list (of delinquent taxpayers). This year there's administrative garnishment. So we're always looking at our processes and techniques and we're trying to make them the most efficient that we can.”
Auditor Hoffer says he hopes to complete this study by the end of the year so that lawmakers can consider possible changes to the program during the 2016 session.
