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State aims to teach taxpayers what's due

Larry Fuchs remembers being horrified last fall when he realized that he hadn't complied with Florida's tax laws.

After all, he had just taken over as executive director of the Department of Revenue, the agency in charge of collecting taxes for state government.

As he pored over tax laws and information in preparation for his new job, Fuchs realized that he should have paid Florida sales tax on a $2,200 home computer he bought a year before by mail order from out of state.

Fuchs quickly paid the sales tax, plus interest.

But the story illustrates a point, he said: Floridians _ including himself, in this case _ don't always know what taxes they owe, and the state loses revenue as a result.

That's why Fuchs has focused on improving taxpayer education since taking over the Revenue Department in November.

Instead of pouring substantial resources into auditing taxpayers who don't pay, Florida should be concentrating on making sure taxpayers know what they owe and when, Fuchs said Wednesday.

A close study of Revenue's organization and functions showed that 97 percent of the agency's tax collections come from voluntary efforts on the part of taxpayers. But only 20 percent of Revenue's staff is devoted to registering taxpayers, providing taxpayer education and processing returns _ all part of that voluntary effort, Fuchs said.

Eighty percent of the staff is used for auditing, investigating and generally dealing with problem accounts that generate only 3 percent of tax collections.

Those percentages don't make sense to Fuchs, so he and his staff have been working on several ways to increase voluntary compliance and keep taxpayers better informed.

The department:

Has begun an effort to revise all tax information brochures that educate taxpayers about what they owe and when. The current brochures are difficult to get through, often citing statutes, citations and other confusing information. The new brochures will be rewritten so that they can be readily understood by the average taxpayer, Fuchs said.

Will spend about $250,000 on an ad campaign this fall, prior to the Christmas holidays, that will inform residents that they may owe Florida sales tax on merchandise purchased by mail order from out of state. If the company selling the product doesn't collect the tax, the purchaser still is responsible for paying it.

Fuchs also said that Revenue began a pilot project to better monitor and collect sales tax on merchandise coming in on out of state trucks, such as furniture purchased by Floridians from North Carolina.

The Revenue Department has installed copying machines in all truck inspection stations, and employees there make copies of bills and send them to Revenue. That way, Revenue knows what has come in on the trucks and whether sales tax is owed.

Will be adding 26 taxpayer education employees to Revenue offices throughout the state this summer. Fuchs said he'll be visiting newspaper editorial boards, explaining the taxpayer education efforts.