Collection of back taxes delayed

Thursday, Nov. 1, 2001 | 9:40 a.m.

RENO -- A legal snag has temporarily stopped the state Tax Commission from hiring a private company to go after an estimated $42 million in delinquent taxes.

The commission is preparing to launch a two-pronged attack to get delinquent companies and individuals to pay up. It is preparing an amnesty plan and at the same time getting ready to hire a debt collection company to hunt down those who owe the state money.

The commission had drafted a regulation giving it authority to employ a private company, but the proposed rule has not been approved by attorneys at the Legislative Counsel Bureau.

Taxation Commission Chairwoman Barbara Smith Campbell said Tuesday she had hoped to have approval from the Counsel Bureau in time for the meeting Tuesday. But it didn't materialize.

"It's urgent for us to move ahead with the collection of bad debt," Campbell said.

The next meeting of the Tax Commission is set for Dec. 3 in Las Vegas.

If the regulation is approved, the commission will be able to decide whether to hire its own debt collection agency or to join with state Controller Kathy Augustine, who has employed two companies to chase down the deadbeat taxpayers for other departments in government.

Assistant Controller Jeannine Coward said the departments of Business and Industry, Agriculture, Conservation and Natural Resources and Motor Vehicles have signed up with the controller to go after the bad debts and bum checks.

She said 6,000 letters will go out soon to those who have stiffed the Motor Vehicle Department with bum checks. The controller's office has hired a company, Prime Recovery, to collect debts of more than $25,000. It will be paid 50 percent of the collection. Another company, OSI, has been hired to collect the debts less than $25,000. It will be paid a commission of 11.75 percent of the debt. That percentage will be added to the amount due.

Augustine's office released a report Tuesday that showed $128.8 million was owed the state and its agencies as of June 30. Of that, $95 million is 60 days past due.

The state Taxation Department reported there is $42.3 million due in back taxes. Another $15.4 million is in bankruptcy court and won't be able to be collected. Another $718,625 is being paid off in installments.

Taxation Department Director David Pursell said part of that $42.3 million involves old debts, which date back 15 years.

The commission Monday wrote off more than $7 million in back taxes because the individuals or companies were either in bankruptcy or the debt was so old it would be uncollectible.