Covering the tax beat

TALKING BIZ NEWS EXCLUSIVE

Robert Snell, a business reporter who covers General Motors at the Detroit News, has one of the most unique side beats in all of business journalism — he focuses on individuals and companies who don’t pay their taxes.

Snell writes the “Tax Watchdog” blog for the paper. He focuses on state and federal tax liens and, based on public records, interviews and Detroit News archives, identifies those who don’t pay income, business and property taxes.

Every year, about $345 billion in federal taxes are either late or unpaid, according to the IRS, ripping open holes in budgets and shortchanging schools and public safety. That forces taxpayers to cough up more than their fair share, tax experts say. About $2.5 billion went uncollected in Michigan between 2000 and 2006.

In recent weeks, Snell has written about rock ‘n’ roll star Todd Rundgren, singer/actor Chynna Phillips, a member of the band ‘N Sync, former Detroit Tigers pitcher Denny McLain and comedian Sinbad. His blog posts include YouTube videos and other amusing information as well.

Before joining the News in 2006, Snell covered crime, courts and local government at The Flint Journal, Lansing State Journal and The Lima News newspapers

Snell, who graduated from Oakland University in Michigan in 1996, talked to Talking Biz News via e-mail on Thursday about his job. What follows is an edited transcript.

How did the paper decide to cover taxes on a regular basis?

I came up with the Tax Watchdog blog idea when I worked on the Metro desk covering economic development, or in many cases, lack of it, in Metro Detroit. I noticed a trend of high-profile developments, developers and entrepreneurs saddled with tax and other debt, which helped explain why projects were stalled or failing. I started to nose around and noticed a surprising amount of public figures and public officials who had the same problem.

With public officials, especially politicians, it raises a legitimate question about the person’s ability to manage taxpayer dollars when they have problems managing their own finances. We were going to do one comprehensive story but instead, in May 2008, I proposed creating a blog that could be continuously updated.

What public records do you find most helpful?

The blog relies almost exclusively on state and federal tax liens but also uses property tax records and federal tax lawsuits.

How do you determine something is a story?

I try to limit the tax posts to public officials and public figures. and people we have written about previously, such as politicians, entertainers and movers and shakers or other newsworthy people. For example, we posted a story on a Michigan resident who won $57 million in the Mega Millions lottery and it turned out he owed delinquent state taxes.

When the PGA Championship was in Metro Detroit in 2008, I backgrounded the top money winners on tour and found pro golfer Tommy Armour III owed more than $863,000 to the IRS. When there are state and local elections, I background the candidates.

How hard is it to get someone to talk about the taxes they owe?

It can be impossible, or extremely easy. They either don’t want to talk or call back immediately. Writing about someone’s finances is such an intimate issue and I’ve found that the people either clam up or respond quickly to explain.

Most of your reporting is done on the blog. When does a story make it to the printed paper?

The blog runs once a week in the paper on our largest circulation day and, in rare cases, when the tax debt is significant or relevant to ongoing coverage. During former Detroit Mayor Kwame Kilpatrick’s perjury case, one of his lawyers scolded the county prosecutor, saying she should spend more time paying her delinquent taxes and less time talking to reporters.

I did some checking and it turned out the mayor’s lawyer had recently paid off more than $1 million in delinquent state and federal taxes and had an outstanding tax bill of $23,600. He eventually left the defense team and filed bankruptcy.

You focus a lot on celebrities and semi-celebrities. What about those not well-known?

As a general rule, I don’t write about people unless they are public figures or public officials. But tax data on less well-known people can be used to illustrate broader points. You could use tax records to show the concentration of delinquent tax parcels in business districts or neighborhoods, for example.

How do you use the paper’s archives to help your reporting?

The archives are a big help bringing context to blog posts, especially if I’m writing about someone who was convicted or accused of a crime. I will confirm certain details from our prior coverage or link to an earlier story.

Why do you think that so few business news operations focus on taxes?

I think the tax system can be confusing to a lot of people, dry and boring. People dread paying taxes, who wants to read about it? The celebrities and public officials help make reading about taxes more palatable, but there’s a pretty serious message underneath. Taxes keep cops on the street and fund every public service imaginable. Don’t pay, those services suffer. Another reason taxes aren’t covered more: Reporters don’t normally run across tax records on their daily beat so there might be a lack of awareness of where to find them.

What kind of response have you gotten from readers?

A lot of extreme reactions. I wrote about the county treasurer filing a forfeiture notice against NHL star Chris Chelios for failing to pay property taxes and got a fair amount of hate mail because he’s such a popular athlete. But when I write about a controversial politician, the responses are much different. I think the general reaction is surprise because most of the people I write about are affluent or in a position of public trust.

What advice would you give to another business reporter looking to cover the tax beat?

Find out where the public records are kept, that’s the most important thing. And find a good tax lawyer as a source who can help explain the types of taxes and the procedures in place when taxes aren’t paid. Patience is key, too. Often times, you have to slog through hundreds or thousands of filings before you find a noteworthy one.

Is the deadbeat tax beat something that’s unique to Detroit, or can it be done in other markets?

It can be done in every village, city and town. The public records are available; you just have to find them.

You seem to enjoy writing this blog.

I love digging up public records, but my primary beat covering GM doesn’t lend itself to public records as much as some of my prior assignments. This way, I can still get my fix. And I wanted to create something that was relatively unique for the Web that reflects my interests. I’m a pop culture and news junkie, and you’ll find plenty of both on the blog.