W.Va. is owed $298 million in taxes
More than $298 million in delinquent taxes is owed to the state, a legislative audit released Tuesday found.
However, state Tax Commissioner Mark Matkovich stressed that that amounts to less than 1 percent of the more than $40 billion in taxes collected over the past 10 years and stressed that it is misleading to suggest all $298 million is delinquent.
It includes accounts under litigation, accounts of deceased taxpayers, as well as defunct businesses and taxpayers who have no assets to pursue, he said.
“Notwithstanding this fact, the Tax Department generally agrees that it is appropriate to implement many of the recommendations made in this report regarding compliance initiatives, through improved training and a review of its standard operating procedures,” he told the legislative Post-Audits Committee.
Using the GenTax tax software system, the audit found 50,189 delinquent personal income tax accounts, totaling $104.7 million; 41,112 delinquent sales tax payments totaling $83.9 million; 20,963 unpaid payroll withholding tax claims totaling $40.16 million; and 79 unpaid coal severance tax accounts totaling $6.9 million.
“Is it fair to say if we collected even a third of that, it would be $100 million?” asked House Majority Leader Harry Keith White, D-Mingo.
By comparison, the state’s 2014-15 budget had a $146 million funding gap that required taking money out of the state Rainy Day emergency fund and other funding transfers in order to make the budget balanced.
In sampling some of the delinquent accounts, the audit found the Tax Division is often not aggressive enough in pursuing payment plans and in imposing liens on delinquent taxpayers.
Matkovich told the committee there are times when the division needs to be flexible and said its emphasis is on increasing voluntary taxpayer compliance.
“The Tax Department strives to keep businesses open, preserving jobs, supporting the state’s economy and maintaining the tax payment stream,” he said.
As for the $104.7 million in uncollected personal income taxes, Deputy Tax Commissioner Kristen Mounts said that includes taxpayers who filed returns but did not pay taxes due, as well as estimated taxes due for individuals who failed to file state tax returns, as cross-checked with Internal Revenue Service databases.
Reach Phil Kabler at firstname.lastname@example.org or 304-348-1220.