Lawmakers could rethink law on delinquent taxes
Published: November 4,2013
Tags: court, garnishment, James G. McGee Jr., Kathy Waterbury, law, lawsuit, legal, legislation, Mississippi Department of Reveue, Mississippi Legislature, overdue tax, PEER, public employee, public official, state, state government, tax, tax collection, tax deliquency, tax revenue, wage
JACKSON — State law currently requires the Mississippi Department of Revenue to garnish 100 percent of the wages of a government official or employee should that person become delinquent in paying taxes.
Going back to September 2011, a legislative watchdog group recommended the law be changed to allow garnishment of 25 percent to 100 percent of wages until the tax obligation is met.
But discussions on the recommendation have been few, and the Legislature has not acted.
Employees of private companies and government entities are subject to wage garnishment, which is the practice of an employer deducting money from a worker’s paycheck before he or she receives it. The amount varies from state to state.
Mississippi’s law dates back to the 1930s. It has been amended over the years, most recently to provide for garnishment of the wages in unpaid child support cases.
“This is an old law,” said Kathy Waterbury, spokeswoman for the Department of Revenue. “As I understand, the idea behind this is that if you are on the public payroll, you should pay the taxes that support the government you work for.”
And, Waterbury said, it would take an act of the Legislature to change it.
James G. McGee Jr., a Jackson tax attorney, has filed a lawsuit in Hinds County Chancery Court to have the law declared unconstitutional. In addition, McGee said he and client hope “somebody in the Legislature would take this thing seriously.”
“I had never seen this 100 percent garnishment until the summer of 2011, when a policeman came to me after getting a paycheck with a zero on it. Now, I have seen a flood of these cases. It is absolutely mind-boggling that we’d have a law on the books in 2013 that would have this effect,” McGee told The Associated Press.
The Joint Legislative Committee on Performance Evaluation and Expenditure Revenue suggested the law be changed. Bills were filed in the 2012 and 2013 sessions but died with little debate.
One lawmaker says the law unfairly singles out state employers.
“They can’t feed their family. They can’t pay their bills. They can’t do anything. That’s why so many of them have second jobs,” said Rep. Deborah Butler Dixon, D-Raymond, whose bill died this year.
Dixon said she will refile the bill next year.
“It is an injustice. I call these people victims,” Dixon said. “It is a shame this keeps happening. A lot of them have called me about this. The state employees … we don’t treat anybody else like this.”
Waterbury said garnishing 100 percent of state/county/municipal employees’ wages is the least preferred method of collecting tax debt.
“It is utilized as a last resort when taxpayers, including public employees, do not respond to notices from the DOR,” she said.
Waterbury said there are payment plan options available if the taxpayer doesn’t have another current payment plan and if the debt is not currently in collection case status. Collection case status is when non-paid tax is no longer subject to appeal and all due process rights are exhausted. The case has moved from voluntary payment to involuntary collections.
Generally, such payment plans are for people who file on time and need to pay the taxes they owe over a period of time. Waterbury said the time for payment plans is not open-ended — there are time limits placed on how long a taxpayer has to pay his back taxes. The DOR’s new online system offers up to 24 months.
Mississippi’s neighbors follow the federal rules for the amount of a garnishment, which allows up to 25 percent of a worker’s wages to be taken.
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