Originally created 04/28/04

States hope tax scofflaws will pay to avoid being outed on the Web



ATLANTA -- To those for whom civic duty alone is not enough motivation to pay taxes, states are rolling out a new weapon: shame.

A growing number of states are hoping to humiliate delinquent taxpayers by putting their names online. Used in at least 13 states, with zingy names like CyberShame and DelinqNet, the Web sites are giving state tax collectors a surprisingly useful tool in gathering old taxes.

"We're trying to shame people," said Danny Brazell of the South Carolina Department of Revenue, which attributes $5.5 million in newly collected taxes to its Web site, Debtor's Corner, started in 2001.

"To have your neighbors be able to see your debt, that would be embarrassing of course, and that's the whole idea."

Some of the state Web sites are getting thousands of hits a day. It's a bit of legal snooping designed to "out" tax evaders.

In Georgia, the latest state to try online shaming, the debtor's list includes two celebrities. The estate of the late rapper Tupac Shakur owes $85,260, and the estate of the late TLC member Lisa "Left Eye" Lopes owes about $550,000.

In two months, Georgia's list has brought in $1.2 million. It's a small sum for a state that estimates $1.6 billion in unpaid taxes, but every bit helps.

"We don't have the assets to go out and chase these 420,000 people ourselves," said Department of Revenue spokesman Charles Willey.

The public humiliation tactic isn't new, just in a new forum. Governments used to post debtors' names in town squares or newspapers.

"Humiliating folks to shame them into paying what they owe goes back a long time. It's proven to be fairly successful," said Sujit CanagaRetna, an Atlanta-based fiscal analyst for the Council of State Governments.

With many states in the red, "they're fishing for all kinds of strategies to reduce these shortfalls," he said.

Privacy advocates warn the tax evader lists could harm the innocent. States do not post debtors' names until a lien has placed against them in court, meaning they've ignored several notices to pay back taxes and their tax information becomes public record. But some fear there aren't adequate safeguards to make sure people get pulled from the list if they've settled up.

"There's always the question of what happens if the government is wrong," said Pete Sepp, spokesman for the Washington-based tax watchdog group National Taxpayers Union. "This kind of information can ruin the financial reputations of people for years."

In Louisiana, home of the CyberShame site, people about to be listed are notified in advance. Fear of being on the Web site has brought in $315,000 over the last three years from people who settled up before being listed.

"These are people who have purposely avoided paying their fair share, and we've exhausted all options to collect," revenue spokesman Danny Brown said. "But once their minister, their next-door neighbor, brother, friends, all them know about it, they're much more amenable to paying what they owe."

States that post tax delinquents on the Internet:

California: http://www.boe.ca.gov/sutax/topdebt.htm

Colorado: http://www.businesstax.state.co.us/delinquent/index

Connecticut: http://www.ct.gov/drs/cwp/view.asp?a 1453&q 266096&drsNav

Illinois: http://www.revenue.state.il.us/IDT/IDTReport.html

Georgia: http://www2.state.ga.us/departments/dor/DeT/DebtInterior.shtml

Louisiana: http://www.rev.state.la.us/sections/cybershame

Maryland: http://compnet.comp.state.md.us/compliance/collections/delinquent.as p

Minnesota: http://www.taxes.state.mn.us/mce/delinqnet/delinqnet-overview.shtml

New Jersey: http://www.state.nj.us/treasury/taxation

North Carolina: http://www.dor.state.nc.us/collect/delinquent.html

Rhode Island: http://www.tax.state.ri.us/lien/XYZ.HTM

South Carolina: http://www.sctax.org/delinquent/delinquent.shtml

Washington: http://dor.wa.gov/content/doingbusiness/delinquentTaxpayerList.aspx

Source: Council of State Governments

On the Net:

CyberShame: http://www.rev.state.la.us/sections/cybershame

Debtor's Corner: http://www.sctax.org/delinquent/delinquent.shtml