Owed tax figure of $715M disputed

CHARLESTON- The West Virginia Tax Department is disputing an audit that found the state is owed more than $715 million in unpaid taxes.

The legislative audit released Tuesday says that out of the $715.7 million, $298.3 million owed can be collected. The totals are as of December 2013.

Tax Commissioner Mark Matkovich said the owed taxes wrongly include accounts that skew the numbers, like dead taxpayers, defunct businesses, penalties and interest. He said some of the owed taxes date to 1994 and represent a sliver of the tens of billions in taxes collected.

Matkovich could not estimate how much of the $298.3 million the state is actually pursuing. The department pulled the numbers from its online listing.

“Frankly, we are a little disappointed by the way some aspects of this audit report are portrayed,” Matkovich told a state legislative panel on audits Tuesday.

The largest bucket of collectable taxes the state hasn’t received was $104.7 million in 50,189 personal income tax accounts, the audit says. The second was $83.9 million in sales tax.

The state also has not received almost $8 million through three coal industry taxes, the audit found. There were 79 instances noted where companies failed to pay their coal severance taxes, which made up $6.9 million of the $8 million.

The findings come as West Virginia starts a new budget year with a $146 million shortfall. State officials dipped into $100 million of rarely touched reserves to balance the spending plan, as the law requires.

The audit by Legislative Post Audit Division director Denny Rhodes says the department lacks adequate policies and procedures to ensure taxes are collected. That portion of the audit covered July 2011 through June 2012.

The Tax Department responded that it would seek improvements to eliminate causes of the findings.