In April, Nebraska's auditor sent the state's Department of Revenue a letter noting how much state residents and companies owed in unpaid taxes: $269.5 million, according to the audit, including $129.27 million in delinquent individual income taxes.

A data table included in the letter showed the problem was only getting worse. Nebraska's delinquent tax balance had increased by $52.4 million since 2020 -- a spike largely attributable to unpaid individual income taxes, which jumped from $87.7 million in 2020 to nearly $130 million four years later.

That's why it surprised and perplexed some union and state officials, as well as former Department of Revenue employees, when the state -- seeking to slash $500 million from its budget at the direction of Republican Gov. Jim Pillen -- laid off 11 revenue agents and two supervisors last week who were specifically responsible for collecting unpaid income taxes from Nebraskans.

People are also reading... Midwest mayor kicks ICE agents off of city property Family mourns 'beautiful soul' killed in Lincoln murder-suicide Commuter alert: Street closure will impact your drive -- until mid-November 15-month-old found in ditch remains unidentified Dylan Raiola's celebration left Matt Rhule limping -- and laughing Double the dough -- popular cookie store expanding in Lincoln Looking back: A 1967 fatal explosion shattered a peaceful afternoon in Lincoln Nebraska volleyball's 10,000-seat remodel and full reseating process explained Huskers climb toward AP Top 25. Here's who voted for them in poll. LES sues Malcolm company for allegedly causing outage, over $96K in damage Diocese of Lincoln reassigns priest after decades-old allegation of sexual abuse surfaces Nebraska Wesleyan makes cuts, forms academic review committee Nebraska Department of Revenue lays off 11 state workers, to close Scottsbluff office This fast-casual chicken chain is coming to northeast Lincoln Double-murder suspect's attorney argues LPD cameras on his house went 'beyond the pale'

"It's just unfathomable to me how you would have a state that doesn't collect outstanding tax obligations, especially for individual income tax, especially at this time of year," said Steve Schroeder, who worked for the Department of Revenue for 38 years until he was among the 13 employees let go Monday.

In an interview Friday, Tax Commissioner James Kamm said the department would "streamline processes" and "leverage technology" to "continue to maintain very strong compliance and collections functions going forward," a task that Kamm noted is the primary job function of "a large share" of remaining department employees.

But Schroeder, who was laid off Monday from the department where he had started as a clerk in the late 1980s and had spent the last 20 years as a supervisor, said the automated system the department plans to use to supplement the loss of 13 employees amounts to "a drop in the ocean to what an actual agent would do."

"If you owe taxes in Nebraska and don't want to pay them, boy, you just hit the jackpot," Schroeder said.

Revenue agents had already relied on automated systems to send two initial notices to delinquent taxpayers after they failed to pay their state income taxes in April, Schroeder said.

The agents would make a "last-ditch" effort with a personal letter 100 days after the initial notice went out, waiting another three weeks or so before it became what Schroeder called a "collection situation," prompting agents to seek bank accounts or income sources to place levies on taxpayers' bank accounts or to garnish their wages.

Kamm said the department can now identify taxpayer bank accounts automatically using technology that state lawmakers authorized last year when they passed the Financial Institution Data Match Act, which allowed the department to use the technology to collect unpaid taxes.

The tax commissioner called the new data match technology "one tool in our toolbox" to help run the department "in the most efficient and fiscally responsible manner moving forward."

He said tax collectors across the department would use the software and maintained the state is "not replacing any folks solely with technology." But he acknowledged that only individual income tax agents had been laid off.

"We feel we took a very hard look at where we could get the most return from leveraging technology and automating processes. That's the simplest way I can put it," Kamm said. "And this was an area that we felt we could do that."

Asked if the new software is up and running, Kamm said "it's kind of a yes and no answer," adding that the department is "focused on getting ready for the upcoming tax season."

Schroeder contended that data match software isn't yet functional and can only identify taxpayer bank accounts, not income sources, leaving it incapable of garnishing wages as revenue agents did.

And, he said, the technology can't speak one on one with delinquent taxpayers -- who, he said, would often prefer to pay their taxes.

"I would say that most individuals want to comply, they just don't know how," he said. "And that was a huge function of the agent. Because once we get to talk to an individual, explain all the options available to them, they are so grateful."

Nebraska Auditor Mike Foley, whose office flagged the spike in unpaid taxes earlier this year, said Friday he would be supportive if the department has indeed identified a better way to collect unpaid taxes, but cautioned that the delinquent balances "are becoming a problem for the agency."

"And fewer people to go out and get them is a concern -- unless there's some magic software package out there that can rope all these delinquent taxpayers and get them to pay," he said. "I don't know."

Kamm, whose agency is embracing the data match software, said he could not predict whether it would ensure Nebraska's delinquent tax balance would decrease in the years to come.

"I cannot predict the future, because I cannot predict what the economy is going to do," he said. "I can't predict whether we're going to have more people employed two years from now or less people employed two years from now. And these are all things that play into what our delinquent tax balances ultimately are."

Top Journal Star photos and videos for October 2025

Reach the writer at 402-473-7223 or awegley@journalstar.com. On Twitter @andrewwegley

0 Comments Love 0 Funny 0 Wow 0 Sad 0 Angry 0

Get Government & Politics updates in your inbox!

Stay up-to-date on the latest in local and national government and political topics with our newsletter.

Sign up! * I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy. Andrew Wegley

State government reporter

Author twitter Author email Follow Andrew Wegley Close Get email notifications on {{subject}} daily! Your notification has been saved. There was a problem saving your notification.

Email notifications are only sent once a day, and only if there are new matching items.

Save Manage followed notifications Close Followed notifications Please log in to use this feature Log In Don't have an account? Sign Up Today

Nebraskans owe $129M in unpaid income taxes. The state laid off the collectors.