Facing a disastrous drop-off in tax revenue prompted by the stock market collapse and the current economic contraction, a number of states across the country are adopting tax amnesty programs – offering qualified taxpayers an opportunity to clear outstanding tax liabilities in exchange for a complete or partial suspension of interest and penalties that might otherwise be imposed.
According to AP, Nevada Taxation Department has given up more than $14 million in penalties and interest to generate over $40 million between July and October.
Oklahoma, like Nevada, has forgiven penalties, enticing scofflaws to voluntarily disclose and pay taxes they owed. Through its 90-day ‘Clean Slate’ program for businesses and individuals, Oklahoma state has been able to collect $82 million, about twice as much as it expected from its offer of amnesty.
Several states such as Connecticut and Massachusetts are drawing up similar plans. New York has already a program under way which began last January. The state has collected $11 million so far and hopes to take in $30 million, AP said.
Meanwhile, Louisiana will consider a similar program when its lawmakers return in April, while Connecticut plans to institute a 56-day tax amnesty offer next spring in the hopes of generating $40 million.
Many states however, are reluctant to offer amnesty programs arguing that it rewards cheaters and discourages honest taxpayers, and more importantly encourages people to hold back on their taxes and simply wait for the next amnesty. Others differ, counter-arguing that tax amnesties, particularly under deteriorating economic conditions, provide states much-needed revenue, without the costs associated with audit and enforcement.
Risk Our Money Not Yours | Get 50% Off Any Account
Disclaimer: This page contains affiliate links. If you choose to make a purchase after clicking a link, we may receive a commission at no additional cost to you. Thank you for your support!
Leave a Reply