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SC Department of Revenue Steps Up State Debt Collection

Department of Revenue to Make it Easier for South Carolina Agencies to Collect Debts from Debtorsshutterstock_573747088

The South Carolina Department of Revenue (DOR) has announced that they will make it easier for the state’s agencies to collect fees, taxes, and fines from debtors across the state. This could make life harder for current and former “ethics violators” who are already suffering financial hardship.

The SC State Ethics Commission announced that it has worked in conjunction with the DOR, which has made overall improvements to two of their debt collection programs. These programs are available to all agencies and local governments in South Carolina.

“The Department will use all available methods to hold ethics violators responsible for unpaid debts,” said Rick Reames III, Director of the South Carolina Department of Revenue. “This joint effort with the South Carolina Ethics Commission makes government more accountable to the public.”

The initiative is part of the state’s recent improvements in a join effort of the Ethics Commission and the DOR called the South Carolina Department of Revenue’s Setoff Debt and Governmental Enterprise Accounts Receivable (GEAR) collections programs.

In this case, the debtors are specifically government workers who violated codes of ethics, including several members of local city councils, school districts, and commissions. Lobbyists, former candidates, other officeholders at the local and state level have also made the debtors’ list.

According to Ethics Commission Director Herb Hayden, many of the ethics code violators are still working on payment plans arranged with the DOR, or working on an appeals process. However, “[if] we can collect, we’d rather continue our own efforts. But those debts that are obviously bad debts that we’ve exhausted our efforts to collect will be sent to them,” since Revenue has greater authority, he said.

The DOR has two debt collection programs it can use. One involves taking money from income tax relief efforts that the debtor could otherwise receive during tax season. The other program is tougher, and involves garnishing wages or seizing bank accounts. This method is more often used for debts that the debtor refuses to pay, not just debts that the debtor has a payment plan for.

The changes began after Governor Nikki Haley received a report from Inspector General Patrick Maley which showed that government agencies and colleges could be owed as much as $1 billion in lost revenue due to unpaid fines and fees related to current and former employees’ and officeholders’ ethics violations.

Maley cautioned, however, that the total could be flawed due to different agencies’ reporting methods. Regardless, Gov. Haley immediately had her Cabinet enroll in both programs, and now the DOR and the Ethics Commission have released a full list of names.

“We applaud the Department of Revenue’s increased efforts and attention,” said Jim Warren, Chair of the South Carolina Ethics Commission. “This initiative reinforces to the public that both agencies and the State of South Carolina take the enforcement of good ethics in government seriously.”

For many on the list, however, this could be a tough financial situation. Garnishing wages or seizing bank accounts could put an already financially overwhelmed person past poverty and unable to continue to pay. A tougher stance on debt collection could mean greater pressure to pay larger, unsustainable amounts.



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