States Shaming People into Paying Back Taxes | AccountingWEB

States Shaming People into Paying Back Taxes

Counting on the fact that people like to know other people’s business, states are capitalizing on the Internet to broadcast the names of scofflaws hoping to shame them into paying their taxes, CBS News reported.

At least 13 states are using cleverly named websites such as CyberShame and DelinqNet to list the names of people who owe the states money.

"We're trying to shame people," Danny Brazell of the South Carolina Department of Revenue, told CBS. South Carolina credits its website Debtor’s Corner with helping to net $5.5 million in newly collected taxes. The site has been up since 2001.

"To have your neighbors be able to see your debt, that would be embarrassing of course, and that's the whole idea."

The sites are generating a lot of traffic from nosy neighbors wanting to see who’s in debt with some sites getting thousands of hits each day. The State of Georgia’s site includes the names of several celebrities, including the estate of the late rapper Tupac Shakur, which owes $85,260, and the estate of the late TLC member Lisa "Left Eye" Lopes, which owes about $550,000, CBS reported. Georgia’s site has garnered $1.2 million in the last two months - a drop in the bucket for a state that has $1.6 billion in unpaid taxes.

"We don't have the assets to go out and chase these 420,000 people ourselves," Department of Revenue spokesman Charles Willey told CBS.

Privacy advocates worry about the states making mistakes and needlessly embarrassing people. "There's always the question of what happens if the government is wrong," Pete Sepp, spokesman for the Washington-based tax watchdog group National Taxpayers Union, told CBS. "This kind of information can ruin the financial reputations of people for years."

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