- The Washington Times - Tuesday, September 2, 2003

RICHMOND — The tax man never forgets a debt, but for the next two months, he’s willing to cut a deal.

The state Department of Taxation today begins amnesty for delinquent taxpayers, a chance to settle past-due tax bills and get a break on penalties and accrued interest charges.

The campaign, which runs through Nov. 3, is intended to recoup an estimated $48 million for the cash-strapped state budget with this proposition to people with past-due bills: Come to us and pay up at a discount, or we’ll come find you.

“It’s fair to say that the program is driven, at least in part, by hard economic times by the government,” said Kenneth W. Thorson, the state tax commissioner. “With the use of amnesty, we are able to accelerate the collection of revenues. We fully believe we will collect those revenues anyway, but it might be one, two or three years.”

The department will mail about 400,000 of the green, white and blue letters to people with past-due tax bills. Each letter will itemize the total debt owed on every delinquent bill, the lesser amount that can be paid during amnesty and the much larger sum that will be owed if the bill isn’t settled by Nov. 4. Some people have more than one delinquent bill.

A $2 million statewide media campaign also makes the ominous point that Department of Taxation officials “know where you live.”

In television ads that commence statewide this week, a man costumed as a giant Taxation Department letter stalks a deadbeat taxpayer on foot through city streets. Exasperated, “Tax Letterman” pauses in the chase to catch his breath, pleading to his fleeing quarry, “… but I know where you live.”

In late October, the spots become less humorous and more urgent.

“From the beginning of the project, one thing we were very cautious of is not wanting to have a statement that’s threatening people, but to have enough authoritativeness to get people to respond,” said Don Morgan, president of Richmond-based Barber Martin Advertising, which created the spots.

“We thought it walked the fine line by letting it have a little lightheartedness,” Mr. Morgan said of the six separate spots, which vary from 15 seconds to 30 seconds.

It’s not the first time Virginia has offered taxpayers a grace period to pay taxes in arrears at a lower rate and without penalty. The last time was 1990, when the state granted amnesty only to taxpayers who settled their overdue debts in full. This time, amnesty applies to as much of the tax burden as a taxpayer can handle, Mr. Thorson said.

Waiving the penalty on late taxes and halving the interest due on the unpaid balance is easier and cheaper for the state than dispatching its lawyers, accountants and agents to collect from those who just won’t pay, Mr. Thorson said.

Some taxpayers allow bills to languish for years, believing that the state will let the whole matter slide. Over time, that can turn modest tax bills into monumental ones, as a Virginia Beach taxpayer discovered.

Mr. Thorson said the taxpayer ignored income tax bills from 1965 and 1966 that totaled $8,000. Thirty-six years later, the amount grew to $129,000 — $117,000 of it interest, he said.

Amnesty offers that taxpayer a chance to cut the interest due in half, to about $58,500.

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