It’s the return of Fix the Tax Code Friday! For those of you who are new (or have forgotten), Fix the Tax Code Friday is your opportunity to sound off on hot topics related to tax.
This week, there has been a lot of discussion about amnesty programs in various states. Pennsylvania just kicked off a wide-reaching amnesty program, most likely in response to the great success of New Jersey’s program. Proponents of such plans say that they give delinquent taxpayers the chance to pay up (great for empty treasuries) and have a fresh start. Opponents claim that the plans send the wrong message to taxpayers and end up rewarding those who don’t pay on time.
What is clear, no matter which side you come down on, is that amnesty programs are becoming increasingly popular among the states and in some cases, municipalities. It all begs the question: does it make sense for the federal government to take a second look at amnesty? So today’s Fix the Tax Code Friday question is:
Don’t forget about Philadelphia’s Tax Amnesty Program, kicking off with Mayor Nutter on Monday 5/3 at City Hall! The program runs May 3 – June 25 and waives all fees and half the interest due on delinquent tax bills. Learn more at http://bit.ly/cqRkba
I don’t mind tax amnesty programs as a short-term fix too much, but over the longer haul the IRS and the states should have some sort of hardship program where they waive penalties AND interest for people who can’t pay the entire balance when due but who agree to pay the balance in installments within, say, 180 days. Most of the people with whom I deal owe the IRS largely because of unforeseen life events; it’s hard to tack a tax bill with a hard-and-fast deadline on top of that AND have that bill start growing if they just can’t come up with the money on April 15.
Yes. We need the money.