MIDDLEPORT — Middleport Village Council will pursue unfiled income tax returns and unpaid taxes through a subpoena program approved Monday evening.

Over 500 current and former Middleport residents will receive letters from Regional Income Tax Administration, the agency the village contracts with for administration of its income tax program. Those letters will go to those who have either worked or lived in Middleport and not filed tax returns as required by village ordinance.

The letter will be the first step in attempting to clear up outstanding income tax cases, according to the Village Fiscal Officer, Susan Baker. They will give the recipient an opportunity to provide a reason for not filing a return or paying taxes, as well as an opportunity to pay up if they owe. Those who fail to respond to the courtesy letter will then be issued a subpoena to appear before RITA tax attorneys, Baker said.

Those letters could go to taxpayers who have delinquent for the past five to six years, Baker said.

The letter-writing campaign will cost the village nothing beyond its usual percentage fee for RITA’s service. The village will pay $8 per subpoena issued under the agreement approved at council’s Monday evening meeting, and those fees will be directly deducted from the village’s semi-monthly disbursement from RITA.

Baker said RITA has access to both the state’s and the Internal Revenue Service’s taxpayer database, and can therefore determine who is working or living in Middleport but not filing their tax returns as the law requires. According to RITA, 552 names are on the list.

“These are people who have not filed returns for multiple years or just one year, and in some cases, there may be a reason why a return was not filed,” Baker said. “In many cases, residents of Middleport work in Pomeroy or other towns with an income tax, and have just not filed a return to indicate that.”

“There is no guarantee of how much revenue could be realized through the program, but the return of delinquent income tax has always covered the costs of the program (in other towns and villages),” Baker said.

The village’s contract with RITA was controversial two years ago when council first approved it, but it has proven to be a tremendous money saver for the village. Turning over collections to the non-profit agency allowed the village to eliminate a position and a department, saving tens of thousands of dollars. As an added benefit, the village has seen an increase in collections through RITA as well.

In 2005, the village paid $45,138 in operating expenses for its administrator and other expenses, but collected just over $200,000. Last year, the village collected $277,105.53 in income tax last year, at a cost to the village of $8,240.40.

In January, Baker said the contract with RITA and the savings it has presented to the village has allowed payraises for police officers and other services provided directly to village residents.