Local governments consider aggressive tax collection efforts

All taxes in the world means nothing if you can not collect on them - or many states and localities are thinking these days. Taxing authorities from Tennessee to New Jersey highlights shortcomings and delays in collection activities and federal funding cuts are felt. 

Some tax authorities are saying enough. New alternative proposals, aggressive and controversial are popping up everywhere, in an effort to fill budget holes. 

Consider Philadelphia. The city, with revenues Commissioner Keith Richardson at the helm, is considering a measure that would allow the city to confiscate personal property to pay off tax debts. Specifically, Richardson is "looking at a company that can help us to start taking people's cars" in an effort to help collect some of the more than half a billion dollars in unpaid taxes from the city. 

Neighbor of Philadelphia, south, Delaware, is also considering aggressive techniques. In school districts fight for more funding, Delaware lawmakers may allow school districts and counties to ensure ownership of the unpaid tax refund of a tax person. The system would be similar to the compensation program already in place for priority debts such as child support. 

A county in North Carolina goes further: in Jackson County, North Carolina, if you do not pay your taxes, you could lose your home. County tax collectors are using the threat of foreclosure to collect unpaid taxes, a tactic that the county had not used since the 1980s. While effective - the county has collected about $ 1.2 million in payments of 85 individual tax delinquents - that the level of aggressive collections is considered as contrary to the public that even the Internal Revenue Service has been deterred from conduct .The state of North Carolina is also being aggressive when it comes to certain types of personal property taxes.

All county tax offices in the Tarheel State now must be linked to the Division of Motor Vehicles (DMV) that could block the DMV registration renewals for vehicles with delinquent taxes. And in Wake County, County tax officials are clearing bank accounts to resolve outstanding obligations of vehicle taxes.In Mississippi, the government has been actively exploiting the properties for non-payment of real estate taxes and personal property, the Office of the Secretary of State now has more than $ 66.2 million of the assets.

 Last year, the state increased its efforts to return the properties to those willing to pay for the auction of the property. The state is accepting bids, a win-win for the state: the state is paid for the property and get back on the tax rolls.Other states and localities are making noise about loyalty. This year, Illinois joins the ranks of alertness that are "aggressively focused on collecting" taxes. It is a stark contrast to contributors friendlier alternative tax amnesty programs, being touted as the latest thing just a few years ago. 

Why take these positions? It's simple. Need income tax authorities. That leaves governments with essentially two options: existing or further taxing new ones. What do you think is more popular? 

The danger with such tactics, however. While taxpayers and tax professionals tend to agree that people have to pay their "fair share" (whatever that is), there are serious concerns about tax credits and fiscal accounts, which are clearly inaccurate.

The concerns are heightened when one considers that many governments and tax authorities are hiring third party debt collectors to resolve outstanding obligations to taxpayers. Third party debt collectors are usually paid as a percentage of the taxes collected and therefore have little incentive to help taxpayers understand their tax obligations, the appeal process or alternatives that may be available. Moreover, what is at stake with the tax tends to be much higher than other personal debt, unlike credit card debt, for example, where the worst is often a lien or judgment, tax debts may result in the confiscation of property, collection accounts or garnishes wages. 

Despite such concerns, the tax collection efforts can become more, not less, ambitious, as the economy remains fairly flat - especially with the kidnapping. Revenues have to come from somewhere. Building cars, houses, bank accounts, wages and other goods can be an easy way to collect in the short term. The real question is whether to put pressure on those who might not be able to pay will lead to more problems in the future.