Pursuing what could either be a cash cow or a wild goose chase, Athens city officials are considering hiring a third-party tax collection agency to track down and collect unpaid taxes.
Athens City Council is discussing city ordinance 0-57-12, which would authorize an agreement with the Cleveland-based Central Collection Agency for income tax collection services.
City tax collectors can’t access Internal Revenue Service data because only tax collection entities with a population of more than 250,000 have permission, according to documents provided by Athens City Auditor Kathy Hecht.
“It’s our duty to collect taxes from citizens,” Hecht said. “Money that is collected through (the agency) is money that we wouldn’t be able to find on our own.”
If passed, Athens would be part of the agency’s Special Members Program and could utilize the agency’s ability to access the IRS database to locate business and residents who haven’t paid taxes to Athens.
The program would primarily target residents who don’t work in the city of Athens and who may not know they owe the city taxes.
For its services, the agency would impose a fee that should not be higher than five percent on all taxes collected through the agency, Athens Tax Administrator Tina Timberman said.
“If they collected $100 for all of Athens, they wouldn’t charge us more than $5 for their services,” said Timberman. “But the money they collect for us would be what we couldn’t find on our own.”
Though five percent is the maximum that can be charged, Timberman expects the city to be charged two to four percent.
Included in the contract would be a 30-day amnesty period in which the city would waive any penalty charges to help taxpayers come into compliance, but interest would accumulate.
“I think that it’s going to be a little bit tight, but, by mid-May, the ordinance hopefully would have been passed,” Hecht said. “So we’ll have a little time to make the public aware of the amnesty program.”
The amnesty period is slated to run from June 1 to June 30.
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