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States Offering Tax Amnesty Programs In 2015

October 6, 2015

Author: Jon Wellington, State and Local Tax Principle at LGT
 

Eight states have begun or are about to begin amnesty programs. Amnesty programs offer taxpayers the opportunity to report and pay delinquent tax liabilities they may owe to the state. While these programs vary from state to state, they generally allow for the waiver of penalties, reduction of some or all of the interest that would otherwise be due and limit the lookback period to three or four years. These programs are open to taxpayers who have not previously filed with the state or who have otherwise been contacted by the taxing authorities.
 
The following list identifies the eight states offering an amnesty program in 2015, the amnesty period duration and the percentage of penalties and interest that would be waived:
1. Arizona: 9/1/2015 – 10/31/2015 (100% penalty/100% interest)
2. Indiana: 9/1/2015 – 11/16/2015 (100% penalty/100% interest)
3. Kansas: 9/1/2015 – 10/15/2015 (100% penalty/100% interest)
4. Louisiana: To be determined but before the end of 2015 (33% penalty/17% interest)
5. Maryland: 9/1/2015 – 10/30/2015 (100% penalty/50% interest)
6. Missouri: 9/1/2015 – 11/30/2015 (100% penalty/100% interest)
7. Oklahoma: 9/14/2015 – 11/13/2015 (100% penalty/100% interest)
8. South Carolina: TBD
 
Taxpayers should be careful before moving forward with an amnesty request. On one hand, these programs generally only last for a few months so it is important to act quickly. Some states will even impose greater penalties on taxpayers who fail to take advantage of their amnesty program. On the other hand, states typically require full payment of any amount due, so taxpayers should consider whether they can afford to make such potential payments (some states offer installment payment plans). Similar relief may be available under a voluntary disclosure agreement, minimizing the benefit of an amnesty program.
 
Under the right circumstances, amnesty programs offer great benefits to taxpayers who have not previously been in proper compliance. Please contact Jon Wellington at LGT for more details at (214) 461-1430 or jwellington@lgt-cpa.com.
 
The services of a legal or tax advisor should be sought before implementing any ideas contained in this blog. To reach a financial advisor at Lane Gorman Trubitt, PLLC, call 214.871.7500 or email at askus@lgt-cpa.com.

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