Tax delinquency a billion dollar problem for NC

Tax delinquency a billion dollar problem for NC (Image 1)

North Carolina is owed about a billion dollars in back taxes, more than $10 million of which is tied to the worst offenders.

The list of tax delinquents in North Carolina is pages long, and those who owe the most have failed to pay anything back or have been the hardest to collect from.

WNCN combed the state database of those who owe the most money, which the state says goes to the general fund. Those funds could be used for anything from paving roads to paying teachers.

[PDF] List of N.C. Dept. of Revenue's Tax Debtors

When WNCN went searching for the Triangle's worst violators, we found the address listed when the lien was handed down was often outdated, leading to nowhere.

One debtor who failed to pay nearly $500,000 to the state is former North Carolina State University and NFL football player Koren Robinson, whose last known address is a house in Cary.

The home is now empty and for sale. That leads to the question: Do disappearing debtors hamper collection?

“Obviously location can be an issue, but we've got a lot of good tools [and] information available to us to help find where taxpayers are,” said Charlie Helms, with the North Carolina Department of Revenue.

The Department of Revenue says Joseph Frederick Denson Jr., of Durham, owes the most money, owing North Carolina more than $591,000 in back taxes. The IRS says he owes more than $6 million to the federal government, according to federal tax lien records provided to WNCN by the Durham County Courthouse.

At Denson's home, WNCN encountered a man who said he was a tax preparer. The man rents space at Denson's home to conduct business. So while Denson owes millions to the federal government, he has a tax preparer working out of his home.

Denson confirmed the tax prep activity taking place on his property, yet when asked if he still owed more than a half a million to the state, he responded, “Yup, pretty much un-collectable. I don't have anything for them to get.”

“Hopefully I can one day [I can pay my taxes], but if you don't have it, you don't have it,” Denson said.

Denson declined to provide WNCN details as to how he owed so much in taxes, but WNCN Investigates found he was targeted by the Securities and Exchange Commission more than a decade ago.

He was accused of being part of a $314 million Ponzi scheme involving at least 1,000 investors. Denson was charged with offering and selling securities in the form of promissory notes, which claimed to provide returns through investments in the car title and payday loan business.

The SEC alleged Denson raised at least $62.2 million. He and the SEC settled, although the terms of that settlement were not disclosed.

So what is the state doing to go after people like Denson? The N.C. Department of Revenue says tax delinquents can have property seized and even face jail time — but only under certain circumstances.

“We have to make the case with any taxpayer that what they did was in fact criminal, in some cases we're able to make that case, in some we are not,” Helms said.

The state has to prove, “Willful attempt to avoid or pay the tax.” Meaning if a debtor is truly broke, it could make it hard to prosecute.

The state wasn't able to talk about Denson's case or what punishment he may have already faced if any. But he told WNCN over the phone that some of his property had been seized.

Denson also said he can't find work because of his past, and the SEC case is partly to blame for his tax troubles.

The state says it has made progress, having collected hundreds of millions in unpaid taxes, but more needs to be done.

The N.C. Department of Revenue said a debtors name and the amount owed don't fall off the worst offenders list until they are no longer a debtor.

Denson said he hopes that happens someday.

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