Talking taxes: Adjusting your withholding
Stick it to the tax man

Taking taxes directly from bank accounts

Stanley And Blanche
Tax departments are somewhat analogous to Blanche Dubois. But rather than kindness, they depend upon the compliance of strangers taxpayers.

Missouri's governor, however, thinks it's time for his state to rethink its policy of waiting for voluntary payments. Gov. Jay Nixon wants state revenue officials to be able to seize delinquent taxes directly from people's bank accounts.

Whoa there cowboy. You are definitely going to have to show me that this is a good idea.

OK, Nixon isn't talking about Missouri tax collectors diving into every taxpayer's bank account. Rather, he wants them to go directly after the money from delinquent taxpayers, not folks who are filing and paying without any problems.

A straight-to-the-source approach, he says, would help replenish the state's treasury. Missouri's revenue collections in fiscal year 2009 were down more than $778 million from what had originally been projected. That was the largest drop ever and nearly 7 percent less than actual revenue collected for the previous fiscal year.

Still, the possibility of state tax collectors being able to just reach into anyone's bank account is a bit disturbing. Actually, it's a lot disturbing.

Sketchy details: I've been digging into the Internet looking for specifics of Nixon's plan and haven't yet found anything. I did locate the governor's letter to lawmakers about his budget. And there's his discussion of 2011 legislative priorities.

But I saw nothing specific in either document about the withdrawal proposal. Just some general talk about previous "refocusing [of] revenue efforts ... to enhance revenue collection efforts, which will generate millions in additional revenues."

I'm not alone in looking for more information. The Kansas City Star reported that many lawmakers still are not fully aware of the details of Nixon's proposals to increase state revenues, particularly those dealing with tax collections.

System already in place: Apparently, says the newspaper, the governor would model the direct withdrawals from delinquent taxpayers' accounts on the existing system that allows the Missouri Department of Social Services to seize money from people's bank accounts to cover overdue child support.

With the voluntary participation of banks, the child support account seizure program periodically matches lists of account holders with a list of people behind on their parental payments.

Now I totally agree that people should pay their child support and their taxes. But I definitely do not like the idea of a government official having unfettered access to my money.

I'm sure there will be protocols and safeguards so that money isn't erroneously pulled from accounts. But we all know that mistakes do happen. And when money's involved, it's often a big mess trying to straighten things out.

Instead, maybe the governor and his tax officials should look more closely at why their collections are down so much. Is it just nonpayers? Or are there other reasons?

I'd sure like to see a thorough examination of the payment problem and any possible remedies before I'd agree to direct withdrawals from private accounts. I hope lawmakers, in the Show Me State and elsewhere that a similar idea might be considered, feel the same.

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Comments

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Steve Williams

Is this not called a Bank levy? I means this exists now with IRS taxes. Don't see how it is shocking.

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