Wednesday, October 7, 2009

Six CT Legislators Among Delinquent Taxpayers

Hartford Business Journal reports:
Six state legislators are among tens of thousands of individuals and businesses who are at least 90 days delinquent in paying their state taxes through September, a Hartford Business Journal computer analysis of tax records has found.

The lawmakers find themselves on the list of delinquent taxpayers at a time when there has been a “measureable increase” in the number of individuals requesting more time to pay their debts because of temporary financial difficulties, state officials said.

It also comes at a time when the value of bankruptcy claims filed by the Department of Revenue Services has increased threefold, to $47.5 million in fiscal 2009, from $14.6 million in fiscal 2008.

Lawmakers on the delinquency list include a majority whip, a deputy majority whip, and an assistant minority leader. Several who owe taxes said they are aware of the debt, but are struggling to make payments because of a financial hardship. One lawmaker said she was unaware she was on the delinquency list, while another said he’s on the list because of an accounting error he made when filing his own taxes a few years ago.

Through a Freedom of Information request to the Department of Revenue Services, the Hartford Business Journal obtained a database containing the names of tens of thousands of individuals and businesses who are delinquent in paying their taxes by 90 days or more.

The database, which was updated as of Sept. 1, includes 193,245 separate entries. In some cases, businesses and individuals are listed multiple times.

The HBJ identified lawmakers in the database by matching it to a list containing the names and addresses of all 187 state senators and representatives. The HBJ computer analysis concentrated solely on those elected officials.

Sarah Kaufman, a spokeswoman for DRS, said the agency has collected $122 million in delinquent taxes in fiscal 2009, an $8.6 million increase from the previous year.

Additionally, the state’s 2009 tax-amnesty program, which was intended to reach taxpayers who evaded reporting all or some of their tax obligations, brought in $25.4 million in previously undeclared taxes.

Delinquent taxpayers on the 90-day delinquency list, however, were not eligible for that program, Kaufman said.

The total amount of taxes owed to the state for fiscal 2009 has not been finalized, but in 2008 that number totaled $571 million, Kaufman said. Overall, state tax revenues declined steeply in the last year, contributing to the $8.5 billion budget deficit.

Kaufman said DRS collection activities include notifying the taxpayer by phone or mail, offsetting debt with refunds from the IRS or other states, attaching a taxpayer’s wages or bank accounts and placing liens on property.

Among the lawmakers who owe taxes is Rep. David A. Scribner, a Republican from Brookfield, who, along with his wife Pamela, is listed as owing $2,169.16 in income taxes.

In a statement to the HBJ, Scribner, who is an assistant minority leader in the House, said the debt stems from “an honest error made a few years ago with regard to how certain income was reported on the tax returns that I complete jointly with my wife.”

He said he mistakenly reported income he earned as an independent contractor as income paid by an employer, rather than business income, which resulted in an underpayment of taxes to the state. He said at the time of the mistake he was preparing his own income tax returns and did not use a professional accountant who might have caught the mistake.

“Since being apprised of this error, I have been working with a tax professional to correct the mistakes and make payment on any taxes, penalties, and interest owed, a process that unfortunately takes some time,” said Scribner. “This was an unintentional oversight that any taxpayer in Connecticut could have made.”

Rep. Auden Grogins, a Democrat from Bridgeport, is listed in the database as owing $348.14 in income taxes.

In a Sept. 15 interview, Grogins told the HBJ that she was not aware of the remaining balance and was not informed about it either. She pledged to repay the debt and thanked the HBJ for notifying her about it.

Sen. Andrew Maynard, a Democrat from Stonington, is listed in the database as owing $4,113.84 in real estate conveyance taxes. Maynard, who is a majority whip, said he is aware of the back taxes but hasn’t paid them because he is appealing the amount owed, arguing that he was overcharged.

He said DRS overestimated the market value of a home that he was involved in selling in 2007, which inflated the real estate conveyance taxes he owed on the property.

He also said he only owned a 50 percent stake in the home, but DRS taxed him as if he owned the property in its entirety.

Maynard said he fully intends to pay the back taxes, once the matter is settled.

“The real issue is they have overestimated the value of the home,” Maynard said. “I wasn’t seeking to not pay my taxes.”

Rep. Ezequiel Santiago, a Democrat from Bridgeport, is listed in the database owing $97.21 in income taxes. Santiago, who is a member of the appropriations committee, said through his press aide that he will be taking care of the situation as soon as possible.

Rep. Terry Backer, a Democrat from Stratford, is listed as owing $1,367.60 in income taxes. Backer, who is an assistant majority whip, said he is aware of the back taxes but a financial hardship within the family has left them unable to pay off the entire balance. He said he is making payments when he has the money available and acknowledges that he is going to be paying a few hundred dollars in penalties since it’s late.

“I’m struggling like everyone else,” Backer said. “It will get paid.”

Rep. Juan Candelaria, a Democrat from New Haven, is listed in the database three times, owing $812.80, $1,327.22, and $6,065.96 in income taxes.

In a written statement to the HBJ, Candelaria, who is a deputy majority whip, said he was aware of the taxes owed and has already made payment arrangements to deal with the issue.

“Many of us, in one way or another, have been negatively impacted during this tough economic time and unfortunately, even as a legislator, I haven’t been the exception,” Candelaria said.

Kaufman said DRS has seen a measurable increase in the number of taxpayers who are requesting extra time to pay a tax debt because of temporary financial difficulties. She said if certain criteria are met DRS will set up a short-term payment plan for them.

Hey CT Legislators (especially Democrats who want to raise taxes even higher) - if YOU cannot even pay YOUR taxes - what makes you think everyone else can?

Imagine that...
accounting errors,
"Gee I wasn't aware of what I owed",
overestimated value of a sold property,
inability to pay and
tough economic times...

Welcome to the real world dear legislators.

YOU'RE struggling????
Please .... so are we all.

Do yourselves, and the rest of us, a favor and stop spending so much!