If you're having issues with income taxes this year, it could be worse. According to a list posted on the Oklahoma Tax Commission's Web site, more than $206 million in taxes have not been paid by individuals and businesses.
The state and its taxes
The top 100 tax delinquencies on the OTC Web site include businesses and individuals owing $25,000 or more and had liens filed against them, said Paula Ross, OTC spokeswoman.
The OTC has posted the top 100 list online since November 2009. The list is updated at least once a week, but usually is updated two or three times a week. While the OTC does provide the top 100 list, the commission does not have a total number of taxes owed to the state.
"We really are just trying to collect the money; there really isn't an accurate way to find the total of what is delinquent, because it varies by the amount," Ross said.
Ross said the list was a two-fold deal: to show a sense of openness to the public in what the tax commission was doing and to comply with past legislation. Through Senate Bill 318, which went into effect Nov. 1, 2009, the OTC is required to post the top 100 delinquent taxpayers on both the OTC Web site and on the state's OpenBooks search function to ensure openness in the state's tax dealings, Ross said.
"A lot of people have been interested in the top 10 (of the delinquent taxpayer list), but really, it is going to be pretty difficult to get any money out of that," Ross said. "Unfortunately "¦ sometimes (the taxes owed) become virtually uncollectable. At the top of that list, that may be some of those instances."
With the top 10 rounding off $134,806,020.35 out of the more than $206 million on the list, many individuals have been listed for decades and have accumulated so much because of penalties and interest from what they originally owed, Ross said.
Bankruptcy, death and prison are among the reasons these taxes become uncollectable, Ross said.
For No. 3 and No. 10 entities on the list, bankruptcy was the case.
KRON Computer Inc., a computer sales and repair company based in Oklahoma City, closed in 1995, according to The Oklahoman. KRON Computers' former owner and individual liability, Ronald S. Murchek, could not be reached for comment.
After a dispute with the OTC over cigarette taxes in 1985, City Vending of Muskogee, the No. 10 entity, reportedly had its license revoked and soon afterward went out of business, Ross said. Unlike KRON Computer, Ross said City Vending of Muskogee did not have individual liability to ensure someone would be accountable for the unpaid taxes.
With individual liability for a bankrupt company not paying taxes, Ross said the OTC is able to keep track of the individual through bankruptcy courts and continually contacts the individual whenever they have assets to start paying off the debt.
The No. 6 entity on the list, Boecking Machinery Inc., an Oklahoma City heavy equipment dealer that owes $2,203,181.18 in income taxes, records show. No records are found on Boecking Machinery after the death of owner Henry Boecking Jr. in 2005.
Top of the list is Bruce Bonnett of Enid in the No. 1 and 2 spots. He owes $90,511,651.33 and $21,995,876.29 for a total of $112,507,527.62 in income taxes, records show.
Convicted in 1988 on 58 counts of bank fraud, records show Bonnett was sentenced to 15 years and ordered to pay nearly $800,000 in restitution to the Federal Deposit Insurance Corp. in connection with the defrauding of the First National Bank of Sapulpa in 1987.
Also in 1988, Bonnett pleaded guilty to a federal drug conspiracy charge and was sentenced to 20 years in prison and a $1 million fine. According to the Federal Bureau of Prisons, Bonnett was released in 2000 after serving 10 years.
Bonnett did not return calls to Oklahoma Gazette.
While the delinquency list contends Bonnett owes more than $112 million to the state due to income tax, Stephen Jones, Bonnett's former lawyer, said that number is "egregiously overstated."
"We asserted that (OTC was) counting many of the deposits twice, and they were counting loans as income, which gave a false impression (and) exaggerated what his true income was when it was really a fraction of that," Jones said.
While Bonnett was in prison, the OTC filed tax liens against him for owing $18 million, and after being investigated by the U.S. government and FBI, Jones said Bonnett's assessed income was a fraction of that.
Because Bonnett had two separate accounts, Jones said the OTC counted what was in both accounts even if Bonnett would transfer the same money from one account to the other.
Ross said the OTC based its tax liens against Bonnett on IRS assessment, and it is possible that he owes less than stated. If that is true, she said Bonnett needs to show the OTC proof of this so they can correct the amount he owes.
While the purpose of the list is to allow the OTC to have openness to the public, it also is public proof of accountability and helps protect the state's property.
Every year, the OTC collects more than $9 billion through voluntary compliance from the taxpayer, Ross said.
Whenever a tax becomes delinquent, the OTC starts a process of trying to communicate with the individual or business that has not paid. This process includes mailed reminders, in house collection groups, field agents and "show cause" hearings. Throughout these stages in the process, the OTC hopes to work out some sort of payment plan to help individuals and businesses stay afloat, Ross said. If it goes beyond the show cause hearing without payment, the OTC contracts an outside collection agency.
"You see the top 100 taxpayer delinquencies, but you don't see how we are working with businesses to set up a payment plan so these companies can stay in business and do good for the community," Ross said.
The state and its taxes
With at least $206 million in taxes delinquent, the state is limited in its resources in terms of the budget.
State Treasurer Scott Meacham said the state budget is very reliant on state taxes, with income tax and sales tax making 75 percent of the budget.
All the state income tax and some of the sales tax go into funding general education, higher education and career tech. All together, 88 percent of the budget goes to 12 state agencies, including public safety, mental health, health care authority, corrections, human services and the departments of health and transportation, Meacham said.
"State services are suffering because of the downturn in the economy and the lack of state revenues," Meacham said. "Clearly, if the people would just pay the taxes they owe, it would be a tremendous help to the state budget. It would allow us to maintain these core services."
By legislative mandate, an amnesty plan to get all outstanding tax liens paid off lasted from September to November 2008 and brought in more than $128 million in previously uncollected taxes, Ross said.
While the program was a success for the state, Meacham said more time must pass before another tax amnesty plan is enacted because if they are held too often, they become counterproductive.
"Whenever a taxpayer goes into delinquency, it isn't a fair and equitable playing field for us that pay," Ross said.