Tax amnesty programs and voluntary compliance initiatives: a way to mitigate declining state revenues.
The Tax Adviser › Vol. 40 Nbr. 6, June 2009
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Tax amnesty programs and voluntary compliance initiatives: a way to mitigate declining state revenues.
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SINCE 2000, MORE THAN HALF OF THE states have offered tax amnesty programs one or more times (see Federation of Tax Administrators, "State Tax Amnesty Programs" (July 2007), www.taxadmin.org/ fta/rate/amnestyl.html). The programs allow taxpayers to "come clean" and report and pay delinquent tax liabilities. They are popular with taxpayers because they provide a waiver of most penalties and, in some cases, some or all of the interest that otherwise would be assessed. States like the programs because they add taxpayers to the rolls and inject much-needed revenue into state coffers without the need for costly audits that may run for an extended period of time. Despite these benefits, there can be serious ramifications for taxpayers, not the least of which is the need to pay significant sums in short order. In addition, failure to pay qualified delinquencies during the amnesty period can lead to significant post-amnesty penalties in certain jurisdictions. States also face challenges by offering tax amnesty given the need to provide balance for taxpayers currently complying with tax laws while adding new taxpayers to the roll...See the full content of this document
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