BIR Director Marvin Pickering, Gov. Kenneth Mapp and Attorney General Claude Walker at Wednesday’s press conference
The Government of the U.S. Virgin Islands is owed more than $400 million in taxes and Governor Kenneth E. Mapp has authorized the Bureau of Internal Revenue and the Department of Justice to take “robust action” to collect at least 15 percent of what is due before the close of the fiscal year in September.
The Governor announced Wednesday that, as part of ongoing fiscal stability efforts, he has directed the formation of a new Task Force, led by BIR and the Department of Justice, dedicated solely to collecting delinquent taxes and prosecuting those that seek to defraud the Government. Governor Mapp indicated that the approximately $430 million in delinquencies included income taxes, gross receipt taxes and hotel occupancy taxes owed over past 10 years. Included in this figure is also $106 million in delinquent property taxes. Earlier this month the Governor announced a new, concerted effort to recoup taxes owed by property owners and urged those who owed taxes to set up a payment plan or risk having their properties sold at auction.
Governor Mapp said it was essential that the Virgin Islands Government go after the “low hanging fruit” of delinquent taxes before borrowing funds to close its fiscal gap. “The $430 million owed to the people of this Territory is low hanging fruit and this Administration will exercise all of its efforts under the law to make a dent in the collection of these monies,” Governor Mapp said. BIR will initially focus on collections in three areas:
- Employers filing W-2s or 1099s with BIR, but no corresponding returns are filed by those receiving payment.
- Individuals or businesses who file taxes without paying in full or who negotiate payment plans that are not satisfied.
- Virgin Islands residents or businesses who improperly file returns outside the Territory.
The Governor has requested that the Task Force provide monthly reports on its collection efforts. He added that no favoritism will come into play when going after tax evaders and that he “doesn’t want to know the names” of those BIR is pursuing. Additional auditors, attorneys and investigators will be assigned to assist in collection efforts.
Attorney General Claude Walker indicated there would likely be some prosecutions of tax evaders.
“There will be no special letter coming – we all know we have to pay our taxes,” Attorney General Walker said. “We may have to prosecute a number of people to show that we’re serious.”
During the Wednesday morning press conference called to announce the Task Force formed to go after delinquent taxes, the Governor also highlighted ongoing concerns with regard to the Government Employees Retirement System. He said the Administration had been slightly delayed in formally introducing reforms as it dealt with the Territory’s cash shortfall.