Like other state tax law changes I have mentioned before, the choice to enact an Amnesty program is spreading like wildfire.
What is Amnesty?
Amnesty is generally a time period established by a state to allow taxpayers who are delinquent on their taxes to come forward, and pay those taxes without penalties being imposed. Usually interest is still imposed, but sometimes it may be waived as well.
With that said, each state amnesty program is different or unique; meaning, they each contain their own set of rules, guidelines and qualifications. Amnesty programs usually pertain to certain tax periods, specific tax types, and taxpayers who meet certain criteria. In other words, "look before you leap."
The following states have enacted or authorized amnesty periods recently:
1. Arizona (SB 1003) - Period: May 1 through June 1, 2009; applies to tax years 2002 to 2007; penalties waived; tax and interest must be paid by June 1, 2009;
2. Virginia (SB 1120) - Period: 60 to 75 day period to be set between July 1, 2009 and June 30, 2010; applies to tax years beginning before 1/1/08; penalties and 50% of the interest is waived;
3. New Jersey (AB 3819) - Period: 45 day amnesty period to be established (believed to be May 1 to June 15, 2009; applies to tax returns due after 12/31/2001; penalties and 50% of the interest is waived;
4. Maryland (SB 552) - this Amnesty program has not been enacted yet, but has been passed by the Senate; Proposed Period: September 1 through October 31, 2009; proposed to waive all interest and penalties;
Professional Help
For all of the above amnesty programs, please consult the bills and other guidelines published by the applicable state for more details. Also, consult a knowledgeable state tax professional to analyze whether your company or your client should take advantage of these amnesty programs.
Note: some of the above programs state they do apply to taxpayers under audit. Again, please see the program's details for additional information.
If you have any questions, please contact me at leveragesalt@earthlink.net.
