Montana governor says efforts to track down tax cheats reaping big rewards

Mont. governor says more tax scofflaws get caught

HELENA, Mont. — Gov. Brian Schweitzer said Monday that efforts to track down tax cheats is leading to a big increase in audit collections at the Department of Revenue.

Schweitzer said audit collections were close to $80 million over the past year, a new record and way up from previous years. Schweitzer indicated he may ask lawmakers to give the agency more enforcement tools.

The governor said the increased collections come from a multiyear effort to find those not paying taxes, mostly nonresidents and out-of-state corporations.

Schweitzer said the Department of Revenue didn’t used to have ways of identifying those that weren’t paying certain kinds of taxes, such as gains on property sales or oil and gas income. He commended agency director Dan Bucks for making it a priority to build ways to track down those skipping out on taxes.

About half of the $80 million in collections comes from nonresidents and out-of-state business interests, a much larger percent than normal tax revenue.

Schweitzer said it’s been a goal to increase tax collections without raising taxes. He said the state is doing comparatively well in the recession that is crippling other state governments in part because of Bucks’ work to increase audit collections.

“That’s real money where I come from and that’s why we have money in the bank,” the governor said.

Bucks said investments to increase audit collections have resulted in a return of $8 for every $1 spent on increased enforcement. He said that is superior to the ratio of the U.S. Internal Revenue Service.

The increased tax collection effort has been a politically sticky issue at the Legislature. In past sessions, the administration has only been able to get some of the increased enforcement efforts it sought.

Schweitzer said lawmakers need to realize that the Department of Revenue is just making sure that people are paying what they owe, and is not increasing taxes. He said more tools for Bucks will mean more money for the state.

“The most important function at the circus is the one who stands at the front gate and makes sure people pay their fair share,” Schweitzer said.

State Sen. Jim Peterson, R-Buffalo, said lawmakers will consider any legislation Schweitzer and the agency bring forward as they have in the past. He indicated there will be reservations.

“The government needs to work for the people. You have to find that balance so that people don’t fear the government,” he said. “We will look at it from that perspective.”