CT and MD Offer Tax Amnesty

As states scramble to find revenue, two states had the same thought: why not try to woo those taxpayers that already owe money rather than just raise taxes? With that, Connecticut and Maryland have announced state tax amnesty programs.

Maryland’s tax amnesty program runs from September 1, 2009 through October 31, 2009. Under the current program, delinquent individual and business taxpayers can avoid civil penalties and pay a lesser amount of interest due the state; taxpayers who are not currently under investigation will also avoid what would otherwise be criminal charges. The state’s last amnesty program ran in 2001; the state collected nearly $40 million with that program.

Connecticut’s tax amnesty program runs from May 1, 2009 through June 25, 2009. Similar to the Maryland amnesty program, participating taxpayers will not be subject to penalties, will have the opportunity to pay less interest and escape criminal charges. All taxes administered and collected by the Connecticut Department of Revenue are eligible for amnesty (assuming you otherwise qualify) including business taxes, individual taxes and estate taxes. For more information, visit Connecticut’s amnesty web site.

These programs allow delinquent taxpayers to file missing returns or correct old returns – in most cases, without fear of penalties or criminal prosecution. It’s like getting a second chance. If you follow the blog, you know that I’m a big fan of limited amnesty programs. Many taxpayers who find themselves in tax trouble feel so overwhelmed by their tax burdens that they more or less shut down and cease filing altogether. By giving those taxpayers the opportunity to correct their records and pay the tax that’s owed (I’m not advocating wiping the slate completely clean), states actually increase the odds that those taxpayers will be compliant in future years. Trust me, I’ve seen it happen. And other states understand the value in amnesty programs: at least twelve other states are contemplating some kind of amnesty program.

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