While the following story may not be happening here in California, it is still an important story that relates to the world of taxes, tax debt and tax delinquency. First of all, a little background. Did you know that there are 28 states that publish lists of people and businesses who owe the most in tax debt every year? The tactic here is clear: shame the delinquent taxpayers into coughing up some money to clear their debt.
Well the state of Vermont recently joined this list of shame-promoting states. They will publish two lists at the end of every year, showing the 100 people and the 100 businesses that owe the most in tax debt.
This tactic is a bit of a double-edged sword. On the one hand, shaming people by announcing that they owe quite a bit in tax debt could lead to many people eventually paying their debt. However, it could also further entrench some people who are outraged by the tactic, leading to prolonged battles over the tax debt.
Ultimately, this story is another crucial reminder to people dealing with tax debt that you should address the issue as quickly as you can. Burying your head in the sand and avoiding the debt that you owe is not going to make things better. It won’t magically disappear. By addressing the issue early on, you give yourself options to effectively pay off the tax debt that you owe. You could even come to a compromise with the IRS or whatever agency you owe taxes to.
Source: FOX Business, “Vermont to join states that publish lists of delinquent taxpayers,” Associated Press, Sept. 8, 2014