Shaming tax delinquents on the Internet has been an effective way to collect money, states say

For years the names of delinquent tax payers have been published in local newspapers in an attempt to get people to come forward and pay taxes. But a new method, of shaming those same people on the Internet—or threatening to post their names and what they owe—is proving to be an extremely effective means of getting people to pay, Elaine Povich reports for Stateline.

The Vermont legislature last year approved publishing the names of the top 100 individual and top 100 business tax delinquents, Povich writes. Those on the lists are notified in advance by letter to give them time to pay. The state, which estimated it would collect $800,000 of an estimated $175 million in delinquent taxes in fiscal year 2015, which will end June 30, has already collected $1.3 million, according to Gregg Mousley, deputy tax commissioner. Mousley, who said at least half of the money was collected before the names were published, predicted a total take of $1.5 million by the end of the fiscal year.

Wisconsin has had similar results, Povich writes. "Officials estimated that publicly naming delinquents would allow them to recoup about $1.5 million annually when they first posted the information in January 2006. Instead, they’ve recovered between $11 million and $31 million annually, according to Stephanie Marquis, communications director at the Department of Revenue. Wisconsin collected $12 million in fiscal 2014 and has garnered $10.8 million so far in fiscal 2015, she said."

"California was one of the first states to publish the names of delinquent taxpayers online, starting in 2007," Povich writes. "Since then, the program has collected more than $414 million from taxpayers in arrears, according to Daniel Tahara, spokesman for the California Franchise Tax Board."

"In most of the states, once a taxpayer pays the money, his or her name comes off the list, and another taxpayer is put on, creating a rotating file of scofflaws, Povich writes. "In California, the list of the top 500 (half individuals and half businesses) is published twice a year. According to the Franchise Tax Board, 41 percent of those who were about to appear on the list made payment arrangements before their names were published, accounting for 205 individuals or businesses." (Read more)