Minn. bill would track tax cheats through banks
By MARTIGA LOHN , Associated Press
April 17, 2008
Minnesota tax collectors want to enlist banks — and their electronic records — in their search for the assets of tax cheats.
The state Revenue Department is pushing a plan to collect an extra $10 million a year in outstanding taxes by making banks, credit unions, life insurance companies and money market mutual funds scan their records regularly and pass on data on tax debtors so the state can get its money.
The provision made it into Republican Gov. Tim Pawlenty's budget recommendations and budget bills in both houses of the Democrat-controlled Legislature — much to the dismay of banks and consumer privacy watchdogs.
With the government running a $935 million deficit, Revenue Commissioner Ward Einess said the plan would help track down some of the more than $450 million in unpaid back taxes. He said Maryland, Massachusetts, Kentucky and other states already match up bank accounts and tax debts, and California and Florida are considering it.
"It's just a more efficient way of doing it," Einess said.
Still, there's resistance from financial institutions, who question whether it would bring in the promised dollars or needlessly draw them deeper into the tax-collection fray.
"This is just more of a fishing expedition," said Mara Humphrey, a lobbyist for the Minnesota Credit Union Network. "We know that these people owe us money — let's see if they have accounts anywhere."
Right now, auditors dig through old tax records to find account numbers, file a lien against the debtor and then send letters to the banks asking them to confirm the existence of an account. That labor-intensive approach netted $12.5 million last year.
Matching up the records electronically every three months would dig up cash they haven't found yet.
Einess said his agency wouldn't use data matches to collect from taxpayers who underpay by small amounts through errors or oversights. Last year, the average amount the state took from debtors' bank accounts was $1,055. A debtor would make the list transmitted to banks only after getting multiple notifications about and chances to settle the debt. A lien must also come first in the person's home county.
The list itself would be encrypted and banks would be required to destroy it after checking for matches. As a further protection against leaking of names, the legislation would let courts order banks to pay damages and attorney's fees for disclosing a debtor's name.
Even so, the prospect of the government and banks swapping information as personal as bank account balances worries Rich Neumeister, an advocate who lobbies lawmakers on privacy issues.
"If you're fighting it or you disagree with the government, is the government going to just come in and take it?" Neumeister said.
More of the article here...http://www.startribune.com/politics/state/17860449.html
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Check out that last sentence. Not only is it overreaching to allow the government accessibility to our personal bank records, to allow them such easy access to money that they [the government] deem rightfully theirs without due process of law (the right to refute it), is a gross injustice of our rights.
Orwell was right. Big brother lives today.
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