RALEIGH (AP) — Delinquent taxpayers in North Carolina owe the state $1 billion, enough to fill almost half the budget gap that lawmakers are looking to address with cuts to public schools, universities and health programs.
The amount of uncollected taxes from both individuals and businesses has doubled from just two years ago, in part because officials have started counting some years-old debts that were once thought to be lost forever. Revenue Secretary David Hoyle said the poor economy and high unemployment rate has also meant more people have been unable to fulfill their tax obligations.
The state has problems with about 5 percent of taxpayers.
"We're just trying to get the money that's duly owed to the state," Hoyle said. "We're down to the ones that either can't or won't pay or are trying to scheme us or scam us."
Almost half the outstanding money is slowly getting collected through wage garnishments or payment plans while others are in the early stages of collection efforts. The state currently considers more than $100 million to simply be irretrievable because there is no income or assets to seize — or because the taxpayer can't be located.
Hoyle said the average state tax collector has about 4,000 cases. A Republican budget proposed this week would likely lead to cuts in the collection efforts, Hoyle said.
Collectors have been rapidly moving some debts off the books, accounting for about $1 billion in uncollected taxes in 2010 — by far the highest in recent years. But that was offset by the $1.25 billion added to collection efforts over the same period.
Hoyle said part of the focus has been on identifying delinquent taxpayers from years past who may now have jobs or assets. He also said the Revenue Department is looking at pockets of noncompliance that may not have been pursued previously.
Former Mebane City Councilman William Hupman is at the top of the state's delinquent taxpayer list, with about $2.2 million outstanding, according to state records. Court records show Hupman has had years of tax troubles, with the IRS demanding in 2003 a tax payment of about $5 million for the 1998 tax year.
A federal judge gave the IRS approval in 2009 to search, seize and inventory Hupman's property. Hupman declined to comment.
The lingering tax dues come amid acrimonious debate over the state's budget, which is projected to have a shortfall of $2.4 billion. Democrats say the $1.2 billion in proposed education cuts proposed by Republicans could lead to more than 20,000 job losses.
Rep. Edgar Starnes, R-Caldwell, co-chairman of the House Finance Committee, said he was unaware of the marked rise in the value of taxes unpaid by delinquent taxpayers.
He pointed out the General Assembly last year gave the department money to go collect back taxes primarily by corporations. A House budget committee examining the department recommended cutting, rather than expanding agency positions.
Starnes suggested the department should shift last year's funds toward hiring people to go after individuals who are delinquent.
"They hired people to go and collect back taxes period," Starnes said.
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Associated Press writer Gary D. Robertson contributed to this report.
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