Infamy, or threat of it, proves effective revenue generator for many states.
Tax scofflaws beware: the Delaware Division of Revenue has just posted its most recent lists of the 100 individuals and businesses with the largest outstanding tax burdens. According to a news release, the practice began in February. 2007 under a program proposed by State Rep. Deborah Hudson.
The program is paying dividends. Since its inception, more than $9 million has been recovered, with $2.8 million coming in over the past year. Revenues were collected through payment of back taxes by those whose names were published on the online lists, as well as those who paid to avoid having their names posted online.
“A number of individuals and businesses pay their tax delinquencies once their name is posted online,” said Patrick Carter, revenue director, in a statement. “Greater still, though, is the amount of money collected from individuals and businesses that pay beforehand so that their information never goes on our website.”
Here’s how it works: In Delaware, the state targets the largest unpaid tax debts of more than $1,000, and adds the next set of 100 names in both personal and business categories every quarter. Before names are posted online, debtors receive an unpaid tax judgment, as well as notification by mail that they qualify to have their name and tax burden on the site.
Taxpayers can avoid tax delinquency shame by paying their balance in full or making payment arrangements. The state doesn’t post information about debtors seeking bankruptcy protection or those who are appealing their tax burden.
A recent Huffington Post article cites Oklahoma, New Jersey, Nebraska and New York as some of the more recent states to embrace shaming of delinquent taxpayers online. According to the article, the number of states embracing the practice now outnumbers the number of states that don’t.
The California Franchise Tax Board posts a list of 500 delinquent taxpayers that have an outstanding tax burden of more than $100,000 on its website. The practice began in 2007 and the state has recovered nearly $120 million. Beginning this July, debtors on California’s list can also have state issued licenses revoked or denied (driver’s, professional and occupational) until the debt is settled or a repayment agreement is made.