THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Tuesday, October 17, 1995 TAG: 9510170270
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY TOM HOLDEN, STAFF WRITER
DATELINE: VIRGINIA BEACH LENGTH: Medium: 92 lines
Faced with thousands of small, unpaid tax bills, the city has devised a computer program that takes the ``man'' out of taxman.
The software speeds up an old collection technique by combining state and city work records of taxpayers who have ignored or forgotten to pay tax bills - regardless of how insignificant they may seem.
On Monday the city mailed 31,000 letters to taxpayers, asking them to pay delinquent personal property taxes or face having their employer foot the bill - a move that assures collection by diverting wages.
``We've always had the ability, but it was a manual process,'' said Virginia Beach Treasurer John T. Atkinson. ``We had to assign someone to the case. Then someone would have to find out where you worked and then the notification process would begin.
``That was expensive,'' he added. ``Any time you assign a person to do work, the costs go up. This way, we have a computer program that does the work and, as such, we are changing the rules about tax collection.''
Thousands of people are accustomed to being late, Atkinson said, and it remains their right to be late.
``But a lot of these bills are lost in the process,'' he added. ``We're talking about small bills here, and we can't afford to chase them down. Sometimes they're too old. Usually we're out chasing bigger bills. It's easy to make the big man pay, but it's very hard to track down the small ones.
``This process allows it to be done,'' he said.
Letters are sent to the delinquent taxpayers telling them that unless they pay, the city will turn to the taxpayers' employers for recovery of the money. If the bill is not paid within 10 days of the notification, then the city will issue a tax lien against the people's wages through the employer. If that fails to collect the bill, the city will seek a judgment in General District Court.
Atkinson estimated that the city might collect about $1.5 million, mostly through bills that are less than $100 each. Unpaid taxes dating to 1990 are the focus of the new effort.
The program has been quietly tested for several months and shows promise.
``We ran a test in June,'' Atkinson said. ``Those who did not pay, based on the letter we sent, had liens issued against their salaries. Of those 8,800, we got responses and had action taken on 9,900 bills - more than the initial number of letters.
``That's a rather good success rate,'' he said, explaining that some taxpayers had multiple unpaid bills.
In the test, the city collected a total of $14,628 from 202 bills dating to 1990, 102 bills from 1991, 423 bills from 1992, 1,200 bills from 1993 and 3,462 bills from 1994.
``And we collected on 2,500 bills that would otherwise have gone delinquent in 1995,'' he said. ``The amount we collected is more than it cost to write the program.''
Virginia Beach, like every other Virginia city, has a variety of legal measures to ensure taxes are paid. In addition to liens on property, cities can issue ``distress warrants.''
These motions allow treasurers to speed up the legal machinery and directly attach a warrant to personal property and sets up the legal framework to begin seizing that property if the taxes are not paid within a reasonable amount of time.
Norfolk Treasurer Joseph T. Fitzpatrick, who once worked under Atkinson, said Norfolk uses a full range of collection techniques.
``If they don't pay, then we'll put the property up for auction and sale,'' Fitzpatrick said.
The city also can file a motion of judgment in which the citizen must come to General District Court and explain why the taxes have not been paid.
``About 90 percent of them pay once they get a motion for judgment,'' Fitzpatrick said.
Getting employers into the act is also an old tool, but it was labor-intensive. That's what makes Atkinson's approach novel - it reduces the work involved in finding delinquent taxpayers.
And it appears that delinquent taxpayers can't escape by moving out of state. Atkinson's program tracks people nationwide, but how exactly he won't say. ``That's part of the program.''
The city always has been able to send a notice, Atkinson explained, but the only real threat was to deny a city decal.
``The problem is that there are many people who change names or move and as such they slip through the cracks,'' he said. ``People also move out of the city and don't need a decal so we have no way of tracking them and now we do.''
No matter what the excuse, Atkinson says his staff is willing to listen and work out arrangements with taxpayers.
``They may not have the money,'' Atkinson said. ``Fine. Contact us and we'll work with them. And we'll take payments.'' by CNB