It’s a tough economy all over these days. It’s not just the feds struggling to raise revenue – state and local governments are facing the same challenges. Ideas abound for plugging holes in the budget, including raising tax rates to implement new taxes on everything from soda to legal services. Some governments, however, have decided to focus on the obvious: collecting outstanding tax debt. So far, the stories have been largely positive. After New Jersey’s overwhelming success with their amnesty program, other governments like those in Pennsylvania, Connecticut, Maryland, and Philadelphia decided to give it a whirl. Next in line? Washington, DC.
Washington, DC is offering a tax amnesty program through September 30 (that means there are just 44 days left). That means that individuals and businesses with unpaid DC tax liabilities can receive an abatement of penalties and fees for almost all taxes. Included in the list of eligible taxes? Individual income taxes, business and franchise taxes, sales and use taxes and estate taxes, to name a few. Specifically excluded are property taxes and the ballpark fee (though with the Nationals sitting at the bottom of the NL East with a 51-67, that tax just has to be more painful than most).
You can watch the official press briefing video for the program here:
I had a quick phone chat with Steve Cordi, CFO for the Office of Tax and Revenue, and Natalie Wilson, OTR spokesperson, to discuss what the program means for the citizens of DC. Cordi explained that the amnesty program isn’t a last-minute scramble; it was originally passed in City Council in the summer of 2009 in an effort to balance the budget. The amnesty program is expected to bring in about $20 million.
In contrast to Pennsylvania’s controversial tax amnesty ad program, DC’s amnesty program is focusing on compliance, not fear. The $750k ad campaign for the program is meant to make an impression with a simple message: it’s time to settle your tax bill. The program is a sixty-day opportunity to pay your outstanding DC tax obligations and make a fresh start without fear of criminal prosecution. Penalties and related fees will be abated during the amnesty program.
To assist taxpayers, the Office of Tax and Revenue is mailing out notices to taxpayers already determined to be delinquent as of December 2009. About 42,000 taxpayers should receive the notice. Of course, if you don’t get a notice, that doesn’t mean you can’t participate. If you didn’t receive a notice but believe that you owe taxes, you can call the OTR at (202) 727-4TAX (4829) or send an email to dctaxamnesty@dc.gov.
You can apply for the program at the Amnesty website. You’ll find an application, two sets of FAQs (and an additional set of FAQs in Spanish) and an interest calculator. The OTR stresses that they want the program to be a success and are willing to work with taxpayers to become compliant. And, unlike a number of high profile customer service failures (*clears throat*) involving outsourced amnesty program, the administration of the program will be performed internally. If you run into a problem during the process, help should be available. But hurry, your last chance to make things right with DC is September 30 – it’s closer than you think!
I think PA did themselves a disservice by the way they promoted their amnesty program – I think it scared people away rather than encourage them to comply – especially, when in reality, the online site was very user friendly and efficient.
Hi TaxGirl! I would also like to add that if a balance is owed to DC, payments can be made through Official Payments using a MasterCard, Visa, American Express Card or Discover card by visiting http://www.OfficialPayments.com and choosing the District of Columbia under State Payments! It’s fast, easy and secure!