SEATTLE -- The Attorney General's Bankruptcy & Collections Unit (BCU) has passed a major milestone-recovering more than $100 million in taxes owed the state over the past 11 years. The amount is nearly double what was anticipated when the unit was created in September 1993.
The BCU was established early in the administration of Attorney General Christine Gregoire after it was discovered that some taxes owed through bankruptcies were not being collected because the state was not represented in the bankruptcy process. In addition to representing the state's interests in such matters, the BCU also provides legal advice and representation in tax-collection matters for the three major state tax agencies: the Departments of Revenue, Labor & Industries, and Employment Security.
The BCU learns of bankruptcy filings through notices bankrupt entities send to creditors, including state agencies that are owed taxes. The unit then monitors those cases and takes legal steps to ensure the tax bill is paid.
While a handful of bankruptcy cases have netted multi-million dollar tax recoveries for the state, the majority of cases involve relatively small sums. The BCU has handled nearly 16,000 cases for the three agencies and the average recovery is in the range of $4,000 per case.
"Much of the money collected is the result of working a lot of small cases," Unit Chief Dan Radin said. "It is amazing how those small recoveries add up to a significant amount over time."
Most of the money collected so far -- $73,295,940 -- was owed to the Department of Revenue. Another $19,366, 815 was collected for Labor and Industries, and an additional $9,031,080 was for Employment Security.
In addition to bankruptcy work, the BCU also handles a significant number of collection actions against the bonds of contractors who are delinquent in tax payments, collecting almost $16 million to date.