Kevin Hunt: State Empties Enfield Woman's Bank Accounts (Avoid That, And Penalties, With Tax Amnesty Program)


The only thing worse than taxes owed is taxes owed that you can't afford to pay.

Gina Sullivan, who says her unemployed husband and two teenage boys were living paycheck-to-paycheck this summer in Enfield, made only token payments on her back taxes but not enough to satisfy the state.

Guess who won this tug-o'-taxes? The state, of course, with an emphatic liquidation in mid-August of two family bank accounts.

"I check my bank account, as I do every day," says Sullivan, "and noticed both my checking account and savings account had zero balances. I immediately called my bank and they told me the state of Connecticut took that money. They even took the $35 that we had in our savings account."

The state, it turns out, wants to help people like the Sullivan family, and not by draining their bank accounts.

The state's latest 60-day tax amnesty program, which expires Nov. 15, offers incentives to deliquent taxpayers in the hopes of recouping some of the estimated $400 million owed in back taxes by about 80,000 taxpayers. (The state Department of Revenue Services, says spokeswoman Sarah Kaufman, is on target to reach the $35 million goal for the program established by state lawmakers.) Each year, the DRS recovers an average of $150 million in unpaid back taxes.

The amnesty program includes almost every state tax except local property taxes and even non-filers of state tax returns (except for motor carrier road taxes) from the period ending on or before Nov. 30, 2012. Applications must be filed electronically through the Amnesty Taxpayer Service Center (www.makeitrightct.com).

Once enrolled in the amnesty program, a taxpayer's interest on the amount owed is reduced by 75 percent and all penalties will be waived for both individual taxpayers and businesses. To receive the amnesty benefits, taxes due must be paid by the end of the amnesty program, Nov. 15.

Sullivan, like many taxpayers, was unaware of both the periodic amnesty program and the always-available payment plans that do not forgive penalties and interest but permit a sensible, affordable payment schedule.

Her tax troubles began with an unexpected bill in February after the DRS discovered an error during an audit of their 2007 tax return. She and her husband, Mike, owed an additional $483 from that tax year. Add to that a $50 penalty and $284.97 in interest.

"I asked if they just discovered this error, how could they charge us a penalty fee plus interest," says Sullivan, a content manager for 17 years at UnitedHealth Group. "They said that is how it worked. I explained to them that my husband was laid off for a year and that we will pay what we can."

When she filed her 2012 state returns in April, the family owed $279. She paid $50, telling the state that's all they could afford with her husband still unemployed. The next month, she says, the state sent a bill that included a penalty and interest.

The Sullivans' situation improved, at least temporarily, in May. Her husband, laid off as a golf course superintendent, found a job at Chicopee (Mass.) Country Club but at half the salary of his previous job. That same month, Gina Sullivan says she received one more notice from the state requesting payment for the total taxes owed, now $1,160.18. Sullivan says the notice included a warning that the state could withhold future refunds to pay off the debt. But she didn't make an additional payment.

"We spent the next few months getting our mortgage caught up, which was near foreclosure," she says, "and getting caught up on our car bill as well. We have zero credit cards. . . . I was hoping to complete my children's back-to-school shopping, then address the debt with the state of Connecticut. Money is just that tight."

The state's quick-strike clean-out in mid-August of the two bank accounts stunned Sullivan. She called the bank. The bank suggested Sullivan ask the state to put her on a payment plan. Good idea, except the state told her it was too late.

"I was told I had received numerous notices," says Sullivan, "so when I asked this gentleman, in tears, you left us with no money and my husband and I don't get paid until next Friday, how are we supposed to feed our kids? He said it was not their problem. As you can imagine, I hung up and cried."

Then Sullivan contacted The Bottom Line, which contacted the office of another Sullivan — Kevin Sullivan, the DRS commissioner.

When you don't pay taxes and fail to enroll in either the amnesty program of a payment plan, the state plays hard. Anyone eligible for the amnesty program, for instance, who fails to enroll faces a 25 percent penalty on any taxes owed through the period covered by the program.

In Gina Sullivan's case, the state stopped waiting.

"When taxpayers fail to pay their taxes in cases like these," says Kevin Sullivan, "we contact them several times. When we get no response or action of any kind, we finally send a 30-day notice that the collection will be enforced through a bank account warrant or wage garnishment. All of this is tracked in our taxpayer records. I am confident we did all of that in [Gina Sullivan's] case."

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