September 19th, 2013 by Judd Ballard
Different state, same tune. Starting this past Monday, September 16th, taxpayers have the next 60 days to figure it out in Connecticut without facing the music. The Connecticut Tax Amnesty Program ends November 15, 2013. Similar to many other states offering amnesty, incentives for participating in the program include lower interest rates and no penalties. The program applies to all unpaid taxes administered by the Connecticut Department of Revenue Services owed for all periods ending on or before November 30, 2012, i.e. no limit to the look-back period.
The bottom line and typical theme every time one of these ideas comes about remains the same…the consequences of not participating may not be pretty. Similar to what we’ve seen in Ohio, failure to participate is inviting a notice of some sort from the Department in the mail. I’ll stick to the tune of tax amnesty programs are rarely, if ever, authorized solely as an act of generosity on the part of a taxing authority. This one most certainly relates to budget correcting.
Take this opportunity to examine any and all nexus concerns. If you’re an out-of-state company, shore up the number of visits your company made into the state, and make sure you understand the nature of those visits.
If you have a physical location in Connecticut, take this opportunity to do a review of purchases for which potential use tax may be owed. It’s an easy tax often overlooked by taxpayers, willfully or not, and it will likely be an area of more strict enforcement now and into the future.
Thinking of not participating? Not only will you not be eligible for the 75% reduction in interest rates, but an additional 25% penalty may apply.
What happens after November 15th? Look for increased audit activities for all taxes. Even if you’re currently under audit, you’re still technically eligible for participation in the program.
Get started. Once you have your unpaid liability calculated, an electronic application must be filed through the Amnesty Taxpayer Service Center for acceptance into the program. Full payment must be made the very same day. Unlike Ohio, no payment plans are available.
Finally, don’t forget to consider the benefits of requesting participation in the Voluntary Disclosure Program. A full analysis of unpaid tax, potential interest, and potential penalty should be performed.