For five years, thousands of Athens residents unknowingly stiffed their city of income-tax revenue.
Now, with help from the City of Cleveland, Athens is tracking these people down and simultaneously rounding up tens of thousands of dollars.
Since the middle of January, Athens has worked with the Central Collection Agency — a division of Cleveland’s Department of Finance — to solicit unfiled taxes from 2006 to 2010.
Without a citywide mandatory filing system for employers, the auditor’s office needed to contract the agency to compare city tax returns with IRS forms, Athens Income Tax Administrator Tina Timberman said. She added there are no plans for Athens to start a mandatory filing system.
Just more than 2,000 residents received letters last month from the agency, requesting copies of all federal tax returns and forms within 30 days, Timberman said.
The agency has received 500 responses as of last Monday, Timberman said.
Although many residents thought the letters were a scam, recipients’ financial information is safe with Central Collection Agency, said Nassim Lynch, the agency’s tax administrator.
“We’re not a for-profit business,” Lynch said. “We are government employees working on behalf of the people. We represent the city to enforce their city income tax code.”
Residents who received a letter — those who have miscellaneous or rental income, who have un-withheld business income or who work outside the city — are suspected of neglecting to pay their city income tax, Timberman said.
Most recipients are taxpayers who didn’t realize the city changed its income tax policy in 2006, she said.
“The law changed, so we then gave a 1 percent tax credit for other municipalities,” she said, adding that those taxpayers didn’t realize they must pay an additional 0.65 percent income tax to the City of Athens.
If the agency finds that a resident owes income tax, the auditor’s office will issue a fine of no more than $50 plus 1.5 percent monthly interest, she said.
The auditor’s office encouraged Athens residents to file their city income tax returns during a tax-amnesty period last June, said Councilwoman Chris Knisely, D-at large, who added that the city raised $50,000 during the amnesty.
Though official revenue from the 2013 collection program won’t be available until the end of the year, Knisely and Timberman both said the partnership with the Central Collection Agency has been a success.
In addition to the $50,000 raised during the amnesty period, Timberman said the agency has charged $60,000, receiving $16,000 of that amount from letter recipients as of last Monday.
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