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advocacy community education
The state of Connecticut is in fiscal
crisis. The projection for the coming fis-
cal year is a whopping $3.7 billion
shortfall in revenues to cover current
budgeted spending.
Governor Dannel
Malloy will need to reign in spending
where possible and look for new
sources of revenue.
Over the last several years, our
Department of Revenue Services
(DRS) has made huge strides in col-
lecting back taxes and identifying non-
filers. Consider the following statistics:
The Collection and Enforcement
Division collected $122,235,123 in
overdue tax revenue in fiscal year
Using the federal refund offset pro-
gram resulted in the DRS resolving
12,980 outstanding accounts and
collecting $9,566,623 in fiscal year
The DRS Special Investigations Unit
made 179 arrests in 2009, a 100 per-
cent increase since 2005 (when they
made 90 arrests). The restitution col-
lected on the 190 cases in 2009 was
$2.6 million.
The Internal Revenue
Service Model
Connecticut is not alone in seeking
more tax revenues from taxpayers who
owe back taxes. In 2009, the IRS
began significant hiring in the examina-
tion and collection areas, adding 2,500
new examiners and 1,000 new rev-
enue officers (collection professionals)
to its ranks in an effort to assess and
collect its way out of its current budget
deficit. The IRS has also put in place a
number of collection procedures over
the last 12 years that have improved its
ability to collect the maximum from as
many taxpayers as possible.
Unfortunately, due to limited resources,
it is unlikely the DRS will be able to
implement large-scale hiring as the
IRS did. However, I believe that the
approaches the IRS has taken to
collect taxes have applicability for
Connecticut and should be considered
by the DRS as a way of achieving more
with the same resources it currently
has. These include:
1. A standardized approach utilized
by all collection personnel to deter-
mine how much a taxpayer can pay
so that representatives and the
DRS are all working with the same
set of rules;
2. The creation of a formal "currently
not collectable" status so that
the DRS can allocate its limited
resources to, and can focus their
efforts on, cases where there is col-
lection potential and not waste time
and resources on cases where tax-
payers are unable to pay currently;
1 "Malloy will propose $2 billion in spending cuts to balance the state's budget." The Connecticut Mirror, January 25, 2011.
Department of Revenue Collection Procedures:
Why Hard Economic Times Call for New Approaches
By Eric L. Green, Esq.