Indiana Hires Three Collection Agencies to Go After $1.9 billion

The Indiana Department of Revenue is continuing its charge to strictly enforce collections on taxpayers who did not take advantage of the state’s 2005 amnesty offer. Those efforts — which, Public Affairs Director Stephanie McFarland told CollectionIndustry.com, include partnering with private collection agencies Premiere Credit of North America, LLC., OSI Collection Services, and General Revenue Corporation (which will collect on out-of-state debt) — are outlined in the final Indiana Tax Amnesty report released today by Governor Mitch Daniels.

Among efforts, more than 32,000 bank account levies and more than 2,000 garnishments have been issued, and $2.5 million has been collected. These actions alone have the potential to bring in $39 million.

“We said we’d go after everyone who didn’t take advantage of the one-time amnesty opportunity, and we’re making good on that promise. Follow-up and enforcement are equally as important,” said Daniels.

The final report of Indiana’s successful amnesty program shows that the program recovered more than $244 million in delinquent taxes dating back as far as the 1970s. Since August, shortly after Revenue processed the final amnesty payment plans that were due June 30, it has enlisted three collection agencies to initiate aggressive collection actions, including garnishments, bank account levies and the initiation of collection lawsuits to pursue the more than $1.9 billion in tax debt that was amnesty eligible. Revenue Commissioner John Eckart said this firm approach is working.

“Amnesty was an opportunity for those who owed to step up. Unfortunately those that did not are facing some tough consequences now,” said Eckart.

On September 7, the Department also launched a mass-billing campaign to collect on unpaid sales tax from more than 70,000 businesses for tax periods from July 1, 2004 through May 31, 2006. These are businesses that have not filed taxes or which filed, but have not paid. The billings were for tax periods outside the scope of amnesty.

“Sales and withholding taxes are the most abused in terms of missed filings and payments,” said Eckart. “We’ve reengineered our collection practices to ensure these delinquencies are pursued immediately.”

Sales and withholding tax make up 75 percent of Indiana’s annual tax revenue sources.

Since the start of the mass-billing campaign, more than 12,000 businesses have contacted the department to address their tax debts and more than $2.5 million has been collected. Another collection campaign for withholding tax targeting 42,000 businesses will start in October.

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