NILES Tax director disputes points in review

About 40 percent of businesses and individuals didn't file income tax returns last year.
By DENISE DICK
VINDICATOR TRUMBULL STAFF
NILES -- The city's income tax director disputes some of the findings of a review by the state auditor, and says some of the report's recommendations already are under way.
The state released the review Thursday along with the city's audit for 2000. The review of the income tax department was requested in March by Mayor Ralph A. Infante Jr.
"Since 1995, I've been concerned about delinquencies," Infante said.
The income tax department is the responsibility of city Treasurer Vickie Flynn-Putnam. It's a part-time, elected position. Flynn-Putnam couldn't be reached Thursday.
The review found that nearly 40 percent of businesses and individuals within the city didn't file income tax returns in 2000.
"I'm very disappointed," Infante said. "We've got 17 departments in the city of Niles that all do a good job and we have this. This is what we live on is the income tax."
Janet Rizer, income tax director, disputed the percentage, saying it may include people who have gotten married and filed jointly with a spouse. She said she's working to determine what she believes is the accurate figure.
The number of people who haven't filed the returns doesn't necessarily mean that they owe taxes. "Our accounts receivable balance is extremely low, I believe," Rizer said.
The department ended 2000 with an accounts receivable balance of $94,498 and collected $5,895,562 for the year.
What report shows: The auditor's report shows increases in income tax collections every year from 1990 to 2000 except for 1996, when two businesses left the city and a third reduced operations. The increase in collections between 1999 and 2000 can be attributed to a new business that established an office in the city and began withholding income taxes for its employees in 2000.
The mayor said he'd like to see all of the 20 recommendations in the review followed. He also wants council to pass an ordinance enabling he and Auditor Neil A. Buccino to oversee income tax collections. A city ordinance says income tax information is confidential.
Rizer also pointed to turnover as a contributor to problems in the department. The income tax department includes Rizer, a chief clerk, clerk and tax investigator.
Behind in court filings: The auditor's report says the department hasn't consistently filed delinquent cases through the court system for the past three years. In 1999, the department didn't file any delinquent tax cases because it was trying to finish the cases filed in 1998.
"By not making it a priority to file delinquent cases in court, taxpayers may perceive that the city will not enforce the payment of income taxes," the report says.
The department sends delinquent notices to delinquent taxpayers but doesn't include a statement informing them that failure to pay could result in charges being filed in court until the second or third notice.
The auditor recommends including a statement in the first notice. The notice also should state that failure to contact the department or pay the required taxes within two weeks could result in charges.
The income tax department should eliminate the third notice sent to delinquents and instead call or visit them after the second notice.
Rizer said the department is moving ahead with the recommendations made in the report. It already has reduced from three to two the number of notices sent to delinquent taxpayers.
"That will allow us to take them to court sooner," she said.
dick@vindy.com