Every April 15, taxpayers around Wisconsin, particularly those who are new to detailed tax preparation, thats me fear the dreaded audit.
This fear could become heightened if the state government approves a new plan to increase the number of audits and collect back taxes.
Gov. Jim Doyle recently proposed cutting $11.8 million from the state revenue department budget. Instead, Tuesday, the Joint Committee on Finance preliminarily approved a plan to hire 31 employees in an attempt to collect up to $70 million in the next two years to help plug the estimated $6.6 billion biennial budget gap.
It wont even dent that deficit, but the idea raises a question, how does the government allow almost $1 billion dollars in taxes to slip past undetected?
To begin the process of answering this question, the committee voted 15-0 to reapportion the $11.8 million to hire the new employees while Democrats who control the Legislature consider Doyles plans to slash state spending, lay off up to 1,100 state workers and order 16 days of furloughs over the next two years, according to an Associated Press article Tuesday.
The finance committee does not have a specific plan yet on how the money will be spent, but will be discussing it privately before presenting the idea for public scrutiny next week, according to the Associated Press.
The goal of the tax collection plan is to reduce the tax gap the difference between taxes owed and those paid voluntarily on time. The plan would allow the revenue department to catch more individuals and businesses who underreport their income or make other mistakes that wrongly reduce their taxes, the AP story reported.
Between 1 percent and 3 percent of Wisconsin taxpayers are selected for random audits every year to determine their tax returns accuracy. Tax auditors bring in between $275,000 and $1.9 million, depending on their assignments, the story read.
While many taxpayers who are audited would pay additional taxes, others would get refunds. All of those who are targeted could face additional costs complying with audits, even if they paid the correct amounts.
Meanwhile, the Department of Revenue reports that delinquent taxes owed by corporations and individuals shot up to more than $1 billion last year. About half of that is not considered collectable because taxpayers died, went bankrupt or for other reasons. But additional employees could help the department collect more money.
Revenue agents assigned to track down delinquent taxpayers generate $1.1 million annually on average. They can call delinquent taxpayers, seize their property, garnish their income and take other steps to get money.
Before this blog entry is over, I must give credit where it is due; thank you to Ryan Foley of the Associated Press for providing information for my thoughts.
Take care and watch out for bicycles.
This fear could become heightened if the state government approves a new plan to increase the number of audits and collect back taxes.
Gov. Jim Doyle recently proposed cutting $11.8 million from the state revenue department budget. Instead, Tuesday, the Joint Committee on Finance preliminarily approved a plan to hire 31 employees in an attempt to collect up to $70 million in the next two years to help plug the estimated $6.6 billion biennial budget gap.
It wont even dent that deficit, but the idea raises a question, how does the government allow almost $1 billion dollars in taxes to slip past undetected?
To begin the process of answering this question, the committee voted 15-0 to reapportion the $11.8 million to hire the new employees while Democrats who control the Legislature consider Doyles plans to slash state spending, lay off up to 1,100 state workers and order 16 days of furloughs over the next two years, according to an Associated Press article Tuesday.
The finance committee does not have a specific plan yet on how the money will be spent, but will be discussing it privately before presenting the idea for public scrutiny next week, according to the Associated Press.
The goal of the tax collection plan is to reduce the tax gap the difference between taxes owed and those paid voluntarily on time. The plan would allow the revenue department to catch more individuals and businesses who underreport their income or make other mistakes that wrongly reduce their taxes, the AP story reported.
Between 1 percent and 3 percent of Wisconsin taxpayers are selected for random audits every year to determine their tax returns accuracy. Tax auditors bring in between $275,000 and $1.9 million, depending on their assignments, the story read.
While many taxpayers who are audited would pay additional taxes, others would get refunds. All of those who are targeted could face additional costs complying with audits, even if they paid the correct amounts.
Meanwhile, the Department of Revenue reports that delinquent taxes owed by corporations and individuals shot up to more than $1 billion last year. About half of that is not considered collectable because taxpayers died, went bankrupt or for other reasons. But additional employees could help the department collect more money.
Revenue agents assigned to track down delinquent taxpayers generate $1.1 million annually on average. They can call delinquent taxpayers, seize their property, garnish their income and take other steps to get money.
Before this blog entry is over, I must give credit where it is due; thank you to Ryan Foley of the Associated Press for providing information for my thoughts.
Take care and watch out for bicycles.
