State Tax Amnesty Program Update

The following are state tax amnesty programs that are currently in effect or will start soon:

1. Nevada (July 1 to September 30, 2010)
2. Florida (July 1 to September 30, 2010)
3. New Mexico (June 7 to September 30, 2010)
4. District of Columbia (August 2 to September 30, 2010)
5. Kansas (starts September 1 to October 15, 2010)
6. Illinois (starts October 1 to November 8, 2010)

All of the above have specific rules regarding who is eligible for amnesty and what tax types and tax years are eligible, etc. Please contact me for details.

What is an Amnesty Program?

In simple terms, it allows taxpayers with outstanding tax liabilities to come forward and pay the tax without interest and penalties. Over the past two years, approximately 20 to 25 states have held amnesty programs or periods like those identified above.

When amnesty programs are not in effect, most states still have what they call “Voluntary Disclosure Agreement” (VDA) programs which allow taxpayers to come forward on an anonymous basis, limit the number of prior years required to be filed (usually 4), and pay taxes and interest. Under most VDA programs, penalties are waived, but not interest.

If you think your company or client may want to utilize one of the above programs, please contact me to determine if they are eligible and if they should take advantage of the program.

Taxpayers who are eligible for an amnesty program, but don’t take advantage of the program, are often faced with harsh penalties if caught after the program has ended.