Tax Day is always an unpleasant experience. Even if you get the government to pay back the interest-free loan you might have given them (sometimes called a “tax refund”), it probably takes, at best, a few hours of time that you would rather spend doing anything else. Of course, taxpayers file and pay their taxes anyway, because they know failure to do so means fines, penalties, and possibly even jail. But they might not know that in certain states, it could mean having their personal information included in public “shame lists.”
Nineteen states continue to operate lists of individuals who are behind on their tax obligations, with the stated or implicit purpose of “shaming” those taxpayers into paying what they owe. Usually, that means including delinquent taxpayers’ names, amounts owed, and even home addresses.
Now, taxpayers fresh off of paying their own taxes may not be in the mood to feel bad for people who aren’t. But the way these lists are structured means that they are not necessarily comprised of scofflaws who are evading their tax obligations maliciously.
For example, some states include taxpayers who owe almost comically small amounts of money. Wyoming lists a taxpayer who owes $4.33, while Colorado includes a taxpayer who owes $10.64 on its list. Those are amounts that a taxpayer could easily not even be aware they owe, and certainly should not subject them to public shame.
Even among states that have a higher threshold for inclusion on tax shame lists, taxpayers can still be unaware or unable to pay. Most states send at least one letter notifying taxpayers before they are included on a list of tax delinquents, but people miss letters, fail to update their mailing address after a move, or go south for the summer.
Taxpayers also aren’t always in a financial position to pay their tax bills. No amount of shame will change that, nor is it the government’s role to encourage people to shame their neighbors that have fallen on hard times.
After all, states have all kinds of other ways to make taxpayers pay what they owe. If the threat of wage garnishment, fees and interest, and possible criminal penalties do not sway a delinquent taxpayer, how likely is it that social disapproval would?
Consequently, studies looking at the effectiveness of tax shame lists have consistently found that they make only the most marginal of impacts, if any at all. In fact, former IRS Taxpayer Advocate Nina Olson testified to Congress in 2007 that tax shaming can even have the effect of convincing compliant taxpayers that tax evasion is more widespread among their neighbors than they thought, making them more likely to see it as a valid option.
As a general concept, tax shame lists are emblematic of a pervasive attitude among revenue officials that any taxpayer who doesn’t pay exactly what the state thinks they owe is a malicious tax cheat. Time and effort spent on maintaining these shame lists would be far better redirected towards improving voluntary compliance among taxpayers who make mistakes trying to comply with what are often confusing and difficult to navigate tax codes.
Taxpayers have enough to worry about without having their personal information broadcasted by state revenue departments when they fall behind on their taxes or miss a notice. The states that keep up this draconian practice should work to eliminate these lists.
Andrew Wilford is a senior policy analyst with the National Taxpayers Union Foundation, a nonprofit dedicated to tax and fiscal policy research and education at all levels of government.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller.