Since the start of 2023, Nevada has written off more than $106 million in so-called “bad debt,” meaning state officials have deemed it impossible or impractical to collect, according to a Nevada Independent analysis.

The four businesses that owed the most money each did not pay off more than $1 million in debts — two of which filed for bankruptcy — and four people also each did not pay off more than $1 million. The biggest offender was a Las Vegas man convicted of Medicaid fraud in 2013. 

Collecting debt is a fundamental — yet underdiscussed — part of Nevada’s government, and there have been minimal changes to the process in the past decade, despite tens of millions of dollars not ending up in state coffers as they should. 

The Indy spoke with the top state official overseeing the process and analyzed decades worth of unpaid debts to better understand why payments fall through the cracks and what the state does to prevent it.

Although unpaid debts have not disrupted any state programs or services — money from collected debts typically goes into a separate account that helps pay for collection services but is rarely tapped into — Deputy Controller James Smack acknowledged the amount of bad debt reinforces the work necessary to improve the process.

“If I’m looking at it from a taxpayer perspective … that seems like an awfully large number when you compare it to the percentage of the revenues we take in on an annual basis,” Smack said. “And so I can understand the concerns when constituents bring it to me.”

States have various processes to write off bad debt, with some having more defined timelines for when unpaid expenses must be written off. In Nevada, the goal is to get unpaid debts off the books after a decade, but no limit is enshrined in Nevada law. Some of the latest write-offs relate to debts from more than 30 years ago.

Some states with populations similar to Nevada, such as Utah and Arkansas, have not publicly reported write-off data. 

Moving forward, Smack said the controller’s office is interested in looking into using an artificial intelligence chatbot that can interact with a debtor and complete any necessary transactions. The office is in talks with multiple vendors about this type of arrangement, which Smack thinks would improve collection rates.

Read below to learn more about how the debt collection works and why the state has been unable to recover tens of millions of dollars.

If the controller’s office determines at least one of the criteria to write off the unpaid debt has been met, it submits the payment to the Nevada Board of Examiners — a panel of the governor, attorney general and secretary of state —  which must give final approval to write off the debt as uncollectible. 

Write-off details

In September 2023, the Board of Examiners approved with minimal discussion the write-off about $85 million in bad debts from more than 50,000 accounts. In August 2025, the board signed off an additional $16 million of bad debt with no discussion.

Click here to view a list of these debts.

Across the past few years, the board has also written off about $5 million in bad debts from the Division of Industrial Relations.

Almost all of the write-offs occurred because collectors had exhausted all possible efforts to secure the payment. This typically means the controller’s office sent a letter to the debtor requesting the payment, and that two collection agencies have also tried to retrieve the payment, Smack said.

Other reasons for the write-offs included that the debt was discharged in a bankruptcy filing, it was found to be legally without merit, the debtor has died or the company filed for bankruptcy or went out of business.

Businesses with unpaid debt will have their licenses suspended because of a 2021 law that passed the Legislature.

Much of the debts were because of various fines and fees whose payments were not made to their respective state agency. 

The second-most common reason — accounting for more than $13 million — was related to wages that businesses did not pay to employees, despite a decision requiring them to do so from the state’s Labor Commissioner. If a payment is eventually made, the Labor Commissioner provides it to the affected employee. 

Additionally, more than $12 million of the bad debts related to overpayments on anything ranging from Medicaid to child care. This refers to situations where the state erroneously paid out too much money but never recovered the differences.

The recent bad debt write-offs also span decades, with few of them coming in the past several years. Agencies typically wait years before officially determining a debt as uncollectible.

The peak of the bad debts resulted in payments due in the early 2010s, which Smack said could have been because of the financial crisis.

A window into the future

Because it often takes years for the state to officially determine a debt as uncollectible, the write-off data offers an incomplete picture of the current state of debt collections.

However, each year, a report from the controller’s office details agency-level data on debts that are expected to be collected or not.

In fiscal year 2025, whose preliminary projections were released in December, agencies reported $387 million in expected uncollectible payments. That was the lowest amount since 2021, as the aftermath of the pandemic saw a surge in estimated uncollectible debts.

The majority of these came from the Department of Taxation, which saw a surge from fiscal year 2024. In response to questions about the cause for the increase, the agency said it was because of guidance from the state’s auditor to determine the collectability of payments with a more immediate timeframe, meaning more recent payments were categorized as uncollectible.

The agency also emphasized that payments not expected to be collected are still being pursued and have not been written off.

Updated on 1/6/26 at 4:02 p.m. to correct the role that agencies and the controller's office play in the debt collection process.