Utah officials want to make it easier to garnish the bank accounts of delinquent taxpayers by requiring banks and credit unions to turn over targeted customer information. But the legislation is raising concerns that monitoring accounts could violate privacy or make it easier for anyone who is owed money to raid them.
Sen. Wayne Harper, R-Taylorsville, persuaded the state legislature's Revenue and Taxation Interim Committee last week to unanimously endorse his bill to automate the search for financial accounts of deadbeat taxpayers who have had judgment liens issued against them by a court. The preliminary approval means the measure can go before the full state legislature in January without the usual requirement of a public hearing.
Harper's bill calls for the creation of an electronic database of people who have liens, along with identifying information such as Social Security numbers.
It would require banks and credit unions to search it once a quarter and notify the Utah Tax Commission of any matches among their accounts. The provided information would include the account holder's Social Security number, bank-account number, account balance and contact information.
Some are worried the system would violate privacy or become vulnerable to access by other creditors. Rep. Joel Briscoe, D-Salt Lake City, has expressed concerns, as have committee members and others.
Supporters believe plenty of safeguards would be in place to prevent abuses.
Dee Talbot, the tax commission's director of taxpayer services, said the database with delinquent taxpayers' information would be housed on a secure computer server and would affect a relatively small number of people who have a court-ordered judgment lien against them.
State Tax Commission Chairman John Valentine said the current tax collection process is expensive and often fails. The commission now uses available information to attempt to locate a delinquent taxpayer's account and sends the bank or credit union a 67-page garnishment document, he added. "Sometimes we guess right, and many times we don't," Valentine said, leaving millions of dollars in taxes uncollected. The request is time consuming for the bank even if the account holder in question isn't a customer.