City to go after tax delinquents when amnesty ends tomorrow

First the carrot, then the stick.

The city is promising a much tougher assault against tax delinquents who fail to take advantage of a tax-amnesty program running out at midnight tomorrow.

City Revenue Commissioner Keith J. Richardson promises increased activity by lawyers and collection agencies to go after those who owe the city money, and to see that more real estate goes to auction because of unpaid property taxes.

The city already is taking advantage of agreements with the Internal Revenue Service to identify city residents who report income to the federal government without reporting it to the city.

Typically, that means people are earning money without getting business-privilege licenses or filing city tax returns. Richardson says the city will aggressively seek $5,000 fines in these cases - even when the tax amounts involved may be relatively small.

For the next 24 to 36 hours, it's still possible to reach a more amicable settlement on unpaid city taxes going back as far as 1986.

If you can reach agreement with the city on the basic amount you owe, whether it's real-estate, business or wage taxes, the city is willing to waive any penalties and settle for just the basic tax payment and half the interest that's built up over the years.

But, except in cases of financial hardship, the city is demanding immediate payment - no more IOUs.

About 19,000 taxpayers had agreed to the deal by Tuesday, filling out tax-amnesty applications and adding more than $17.8 million to the city's coffers.

The city's goal is significantly higher - $30 million, already worked into budget calculations. But as this week's deadline approached, city revenue officials said there were signs of heightened interest in the program, including a $2 million payment Tuesday morning from a single, unidentified business - the biggest payment since the city opened the amnesty program in early May.

All the figures are minuscule compared with the delinquent taxes that the city has been carrying on its books - about $582 million in base taxes, plus another $360 million in interest and penalties.

But much of the money is considered uncollectible - owed by individuals who have died or moved away to unknown locations, or by businesses that have gone bankrupt or closed their doors.

Richardson wouldn't guess the amount of uncollectible taxes.

Both Richardson and City Controller Alan Butkovitz said it appeared that the city was on target to meet its relatively modest goals, though the final figures won't be available until next week.

"It is a great deal that's being offered to people," Butkovitz said. "The city wanted to show that we've tried to be reasonable and give people a break."

But when the amnesty period ends, Butkovitz said, it's important that the city follow up with a "very aggressive" collection program - perhaps leading to further negotiations and payment agreements with delinquents who did not have enough money up front to participate in the amnesty program.

"I suspect there may be a problem with many people being unable to pay the full amount they owe," Butkovitz said.

Richardson said taxpayers wanting to take advantage of the amnesty program would be allowed to "self-certify" a level of financial hardship preventing immediate, full payment of the amounts they owe.

But city revenue officials would have the right to see tax returns to audit the amnesty applications, Richardson said, and taxpayers may lose their amnesty if they're in better financial shape than they claim.