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CPAs Call On Hacienda And CRIM To Purge Debtor Lists

CPAs Say Government Notices Upset Many Taxpayers And Their Accountants; Question Hacienda’s Collection Figures


June 19, 2003
Copyright © 2003 CARIBBEAN BUSINESS. All Rights Reserved.

The government must allocate the necessary funds to the Treasury Department (Hacienda) and the Municipal Revenue Collections Center (CRIM by its Spanish acronym) to purge their debtor lists, said Juan Jose Santiago, president of the Puerto Rico Society of Certified Public Accountants (CPAs).

Santiago told CARIBBEAN BUSINESS that Hacienda’s latest campaign to minimize the government’s budget shortfall–estimated at $200 million for the current fiscal year, which ends June 30–by collecting allegedly outstanding debts from individuals and corporations has caused discomfort among taxpayers who have already paid or had their debts prescribed.

"There’s a huge problem in Puerto Rico with the purging of debtor lists in government agencies such as Hacienda and CRIM," said Santiago. "It is time for the government to allocate the necessary funds to clean up these lists."

Santiago said the Society of CPAs is aware of the state of the economy and that there isn’t much money in the government’s coffers. However, he believes this issue must be addressed.

"The purging of debtor lists is a matter of a lack of funds and resources. The government must verify its systems and find the way to purge these lists," said Santiago. "Many taxpayers whose debts were paid off or prescribed are finding that their debts have resurrected. This has upset many taxpayers and their CPAs, who thought they had resolved the issue."

In its efforts to overcome a $200 million budget deficit, Hacienda began a debt-collection campaign two months ago. It sent 309,700 debt notices to individual taxpayers, corporations, and employers. The campaign is part of the government’s tax incentives program, which gives people who owe taxes a discount on their outstanding debt if it’s paid in full.

Treasury Secretary Juan Flores Galarza has acknowledged that more than 50% of the debt notices shouldn’t have been sent.

According to the Treasury Department, nearly 97% of the estimated 15,000 taxpayers so far who have chosen to participate in the government’s incentive program have paid 70% of their debt, thus receiving a 30% discount. Taxpayers have until July 31 to join the program.

The government expected to collect $125 million through the debt notices and tax incentives program, but so far, it has collected only some $25 million. Society of CPAs President Santiago said the government’s collections estimates were based on faulty debtor lists and therefore the agency will fall short of its goal.

"I don’t know if Hacienda expected to collect all the debt that didn’t exist or has already been prescribed," he said. "If it based its estimates on the debtor lists, those estimates are wrong."

Hacienda has needed to purge its debtor lists for years, said Santiago, who noted that the situation at CRIM is the same or worse. "CRIM has to purge its lists because it has the same problem," said Santiago. "I hope the government pays attention to this issue and allocates the necessary funds and resources to solve this problem once and for all."

Earlier this week, House Treasury Committee Chairman Francisco Zayas Seijo said he intends to file a bill that, if approved, would obligate Hacienda to send periodic debt notices to individuals and corporations.

This Caribbean Business article appears courtesy of Casiano Communications.
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