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ALBANY, N.Y. The U.S. financial meltdown is creating brighter job prospects for at least one occupation: tax collector.
Several states – including New York, Massachusetts, California and Illinois – are beefing up tax enforcement and collection as they face widening budget deficits.
“As their budgets quickly hit the skids and the pressure is on, they're going to be looking to see where those dollars are,” said Verenda Smith of the Federation of Tax Administrators, an association of tax agencies from all 50 states.
Their targets range from major corporations to small businesses and individuals.
In New York, tax collectors have been trumpeting their crackdown, aiming to persuade tax cheats to change their ways.
“I'm not interested in a lot of arrests. I'm interested in increasing the number of voluntary taxpayers,” said William Comiskey, the state tax department's deputy commissioner for enforcement.
New York tax collectors recently sent letters to thousands of small businesses advising them of the consequences of not collecting or remitting state sales taxes. They'll soon send letters to thousands of taxpayers whose returns were done by preparers who are under investigation for fraud, Comiskey said.
The warning letters are part of a broader campaign to publicize the crackdown and steer tax cheats to a new program that will allow them to avoid criminal prosecution.
Officials expect the program to yield $30 million a year, a pittance compared to New York's projected $8 billion budget deficit for next year.
Tax collectors are likely to focus their stepped-up enforcement on small businesses, according to The Tax Foundation, a nonprofit research group. That's partly because small businesses tend to be the biggest tax evaders, particularly during economic downturns, said Patrick Fleenor, the group's chief economist.
But some states, including Massachusetts and Illinois, are targeting large corporations as well, focusing on those structured as “pass-through” companies that shift their income tax liabilities either to shareholders or to the states where they are based.
