OUR THOUGHTS ON:

Texas and Alabama offer Tax Amnesty

State and Local Tax|Tax

By Jack Stewart

Texas – Beginning May 1 and running through June 29, Texas will offer tax amnesty for liabilities that have not been previously reported to the Comptroller.  The amnesty applies to periods prior to January 1, 2018.  Taxpayers who come forth and settle their eligible delinquencies can do so without interest or penalties. 

Ideal candidates are generally taxpayers who do not have a Texas Sales and Use Tax Permit, are not registered for a tax or fee administered by the Comptroller’s office or are taxpayers who have a permit, but have underreported and owe additional taxes or fees.  The program does not apply to periods under audit, IFTA taxes, PUC Gross Receipts assessments, Local Vehicle Tax and Unclaimed Property payments.  Further details are expected to be forthcoming as we reach the beginning of the amnesty period.

Alabama – Beginning July 1 and running through September 30, Alabama will offer tax amnesty to taxpayers with liabilities that were due prior to January 1, 2017 or periods that began prior to January 1, 2017.  The program provides for a three-year or 36-month look-back period, except for instances where the taxpayer collects the tax, in which the look-back period would extend back to when the taxpayer started collecting the tax if it exceeds 36 months. 

Taxpayers who come forth and settle their eligible liabilities can do so without penalties and interest.  However, penalties could be imposed at a later date if it is discovered that the taxpayer did not comply with the amnesty provisions and/or provided false or fraudulent information.

Taxpayers must comply with the following requirements:

  • All applicable returns, supporting documentation and full payment of the tax must be submitted on or before November 15, 2018.  A payment and return that is submitted via the U. S. Postal Service in a properly addressed envelope is considered timely if postmarked on or before November 15, 2018.  Payments and returns delivered via courier are considered paid the date they delivered to the Department of Revenue’s headquarters or regional office. 
  • The current-year return is to be included with the amnesty returns for the eligible tax type.  Penalties for failure to timely file and pay will be waived; however, waiver of interest will not apply to the current-year return.

Amnesty will not apply to taxpayers under any of the following circumstances:

  • Taxpayers who are party to a criminal investigation or criminal litigation that is still pending as of March 6, 2018 for the non-payment, delinquency or fraud in relation to any state tax imposed by the state and administered by the Department of Revenue.
  • The taxpayer has delivered or disclosed a false or fraudulent application, document, return or other statement to the Department of Revenue in connection with an amnesty application.
  • The taxpayer has been issued a final assessment in which the appeal period has ended.
  • The taxpayer has entered into a voluntary disclosure agreement with the Department of Revenue before December 31, 2017.
  • The taxpayer has been granted amnesty for the tax type as part of the Alabama Tax Delinquency Amnesty Act of 2016.

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