We reviewed DOR's collection practices, surveyed private collection firms with which DOR contracts, and researched collection best
practices. Based on this work, we determined that DOR does not timely contact taxpayers by phone, does not have a strong performance
management approach to collections and does not sufficiently use technology and automation to improve the efficiency and effectiveness of
its collections efforts.
Using IRS data provided to DOR each year, we identified approximately 66,000 individuals who should have filed state income tax returns for tax year 2007, but had not as of the end of March 2009. We estimate these non-filers owed about $109 million in tax liability for tax year 2007. This represents an additional 2% of personal income tax liability. Based on past collection rates of non-filer debt, DOR would likely be able to collect about $54 million of the total liability over a five-year period.