Summing It Up

Keeping you ahead of the curve with timely news & updates.

Connecticut State Tax Update: Fresh Start Tax Amnesty Program


Connecticut announced it is launching the CT Fresh Start, an amnesty program for all eligible taxes administered by the Department of Revenue Services (DRS).  The program started on October 31, 2017 and runs through through November 30, 2018. 

Connecticut is allowing eligible taxpayers to enter into a CT Fresh Start Agreement during this time by completing a simple online application.  Taxpayers will only have to pay the tax due and ½ the interest at the time of the application filing.  The state will waive all penalties and the other half of the interest that is due. 

And the best part about the program?  No returns are actually required to be filed!

Connecticut Tax Amnesty for Both Personal and Business Tax Delinquencies

  • All qualifying delinquent taxes due and payable as of December 31, 2016 that are unreported or underreported are eligible. The qualifying taxes may be either personal or business taxes and include all taxes administered by the DRS (except for the taxes imposed under chapter 222 (IFTA), such as:
  • Income tax,
  • Business entity tax,
  • Sales and use tax,
  • Withholding tax,
  • Corporation business tax, and
  • Gift tax

Note that the amnesty program  does not apply to local property taxes, payroll taxes administered by the CT Department of Labor, fees imposed by the Secretary of State, or taxes owed to the federal government.

What’s Not Eligible for Amnesty

Taxpayers who have received prior communications from the Department of Revenue Services for any tax type and period, such as a bill, are currently under audit, are party to a closing agreement with DRS, have made an offer of compromise that has been accepted by DRS, have protested a determination of an audit, or who are a party to litigation against the Commissioner, are not eligible under this program for that particular tax liability.  However, taxpayers may be eligible to resolve other tax liabilities through the program.

More Good News: Limited Look Back Period

Another  great feature of the CT Fresh Start program is that it offers a limited look-back period.  

That means that while normally, there is no limit to how many years the DRS can go back to assess tax, penalties and interest on any return that was not filed, under the CT Fresh Start, the taxpayer will only be required to “look-back” and report the tax on just three years of unfiled returns.  If the taxpayer complies with the terms of their agreement, all liabilities for the applicable taxes prior to the three year look-back will be abated.

In order to qualify for the limited look-back period, the taxpayer must have never been registered or filed a return for that tax type. Any taxpayer that believes they qualify for a limited look-back period, must call DRS prior to applying for CT Fresh Start.

Following the CT Fresh Start program, the taxpayer is required to be compliant with any tax return and payment for the three-year period after the date of the CT Fresh Start application. If the taxpayer does not comply with the CT Fresh Start agreement, the DRS may reinstate all applicable penalties and interest for the taxable periods covered by the CT Fresh Start agreement.  

Freed Maxick Can Help You with the Connecticut State Tax CT Fresh Start Program

So if you are looking for a “fresh start”, our state and local tax professionals can assist you with getting started with the application and help you navigate through the process towards becoming compliant with Connecticut taxes.

Contact us here, or call 716.847.2651 for a no cost, no obligation discussion of your situation.

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Commerce, Amnesty and Storm Relief in State/Local Tax Update

Oct SALTThe latest Freed Maxick State and Local Tax Update contains a number of must-read items from around the country.

Illinois economic development: Legislation has reinstated and modified the EDGE credit program until June 30, 2022. The Economic Development for a Growing Economy Tax Credit Act (EDGE credit) may be claimed by new or existing businesses that create or retain jobs in Illinois. It is available to any individual, corporation, partnership or other business entity with an Illinois income tax liability and that is engaged in interstate or intrastate commerce. The business purpose can be for manufacturing, processing, assembling, warehousing, or a variety of specific other processes or services. There is a requirement of a minimum of $2.5 million of capital improvements placed in service in Illinois for businesses with more than 100 employees, while companies with 100 or fewer employees have no capital investment requirement. See the Update for a list of further conditions.

Rhode Island tax amnesty: The state’s budget bill, signed by Gov. Gina Raimondo, included a provision for the establishment of a tax amnesty program for all taxpayers owing tax. From Dec. 1, 2017 to Feb. 15, 2018, all late-filing penalties will be waived and participants will only be required to pay 75% of the interest accrued on late filings. The state will not pursue criminal or civil prosecution against any taxpayer under this program, assuming the taxpayer has either paid or entered into an installment payment agreement to pay all taxes and interest due.

Virginia amnesty: The state allows eligible taxpayers relief for delinquent returns filed from Sept. 13 through Nov. 14 this year. Taxpayers will have to pay the tax due and one-half of the interest. At the end of the amnesty, taxpayers with unpaid taxes that were eligible for relief and did not participate in the program will be subject to an additional 20% penalty.

Hurricane filing-deadline relief: In wake of the recent hurricanes such as Harvey and Irma that struck the southeastern U.S., many states are providing tax relief for taxpayers residing in areas designated as disaster areas by the federal government. In general, most states are extending deadlines to Jan. 31, 2018, for tax returns that had original or extended due dates between Sept. 4, 2017 and Jan. 31. Florida and Virginia have later extension deadlines of Feb. 15 and March 2, respectively. Some states provide additional specifications for taxpayers seeking relief. See Update for more details.

Other news: The Oklahoma Tax Commission has adopted changes to sales and use tax rules; the South Dakota State Supreme Court rejects the internet tax law; the Multistate Tax Commission has extended the deadline for the voluntary disclosure initiative for online marketplace sellers; Illinois legislation was passed that authorizes the state’s Department of Revenue to exchange personal October 2017 SALT Updatesincome tax return information with the State Treasurer’s office; and drastic changes are made to the Illinois unclaimed property law.

See the State and Local Tax Update here to learn more or contact a member of the Freed Maxick SALT Team for a no cost consultation.

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Ohio Tax Amnesty Program and Voluntary  Disclosure Program

Ohio Tax Amnesty ProgramOhio will be administering a tax amnesty program from January 1, 2018 through February 15, 2018. Taxpayers who come forward voluntarily during this program will pay all taxes and one-half of the interest that is due. The state will waive all penalties and the other half of the interest and the taxpayer will not have any potential civil or criminal actions taken against them with respect to the tax.

Ohio Tax Amensty Program Eligibility

If you have delinquent taxes due and payable as of May 1, 2017 that are unreported or underreported you are eligible for tax amnesty. The qualifying taxes may be either personal or business taxes including personal income and school district income taxes, financial institution, sales, use, tobacco products, and commercial activity taxes. It does not apply to municipal or township lodging tax or resort area tax.

However, taxpayers who have received prior communications from the Ohio Department of Revenue, such as a notice of assessment, bill, notice of audit, as well as taxpayers currently under audit, or who have been audited, are not eligible under this program.

Looking Ahead

The state has yet to issue full guidance on the program.  Further information should be available once the program dates are closer.

Another consideration for some taxpayers is that  Ohio almost always has a Voluntary Disclosure Agreement Program (VDA) available for use at any time for various taxes. The VDA is open to non-filing taxpayers who enter into and have executed an Ohio Voluntary Disclosure Agreement prior to any contact from the Ohio Department of Taxation. The VDA generally limits the look-back period to three years plus the current year. The rules of the VDA program differ from the Amnesty Program in that the non-filing taxpayer waives their right to a refund for the look-back period and must pay all taxes plus interest due when filing. In exchange, the state will waive all penalties for those tax years, plus all tax years prior to the years covered by the agreement. The Voluntary Disclosure Agreement Program may be more advisable in situations where a taxpayer may have Ohio liabilities related to periods older than three years.

Need Assistance with the Ohio Tax Amnesty Program?

If you have any operations in OH that you have been reluctant to report, now is a good time to do so. Our state and local tax professionals can assist you with any issues you would like to discuss and help you navigate through either the Amnesty or Voluntary Disclosure Agreement Program to become compliant with Ohio taxes, contact us here.

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Oklahoma 2017 Voluntary Disclosure Tax Amnesty Program

Oklahoma 2017 Tax Amnesty ProgramOklahoma has currently enacted a tax amnesty program for the period beginning September 1, 2017 and ending November 30, 2017. Taxpayers should take this opportunity to voluntarily file delinquent tax returns and avoid potentially high penalties, interest, and other possible collection fees.

What Oklahoma Taxes are Eligible for Tax Amnesty?

There are a wide variety of taxes eligible for Oklahoma’s amnesty program, including:

  • Mixed beverage tax
  • Gasoline and diesel tax
  • Gross production and petroleum excise tax
  • Sales tax
  • Use tax
  • Income tax for periods ending prior to January 1, 2016
  • Withholding tax

Who is Eligible (and not Eligible) for the 2017 Oklahoma Voluntary Disclosure Initiative?

Individuals, businesses, and other entities with Oklahoma tax delinquencies are generally eligible to participate in the program.

The following taxpayers do not qualify for the program:

  • Taxpayers with delinquent taxes other than those listed in the section above.
  • Taxpayers that have already been contacted by the Oklahoma Tax Commission regarding potential delinquency.
  • Taxpayers that have collected sales and use tax or payroll taxes from others, but have not remitted them to the state.
  • Taxpayers that have participated in a voluntary disclosure program for that tax in the past three years.

What Are the Benefits of Voluntary Disclosure?

For taxpayers that take advantage of the limited window of opportunity for voluntary disclosure, Oklahoma will waive all the penalties, interest, and other fees for any taxpayer who participates in the program. It’s important to note, however, that the period that additional taxes can be assessed is limited to three years for annual returns and thirty-six months for all other filings.

For taxpayers that have collected taxes from others but not reported the taxes, a modified voluntary disclosure agreement is available where penalties are waived. Interest may still be charged and the time period includes all periods in which taxes were collected and not remitted to the state.

How to Participate in the 2017 Oklahoma Voluntary Disclosure Initiative

To participate, taxpayers must file all delinquent tax returns and make the required payments (or enter into an accepted payment program) within the disclosure period. Taxpayers should also be aware that for one year following the initiative period, they must continue to pay and remit applicable taxes, otherwise the penalties, interest, and other fees will not be waived.  

Get Assistance for Voluntary Compliance

If you are a delinquent Oklahoma taxpayer, you should consider getting assistance from experienced tax professionals that can help you navigate through the program, and ensure that you are in full compliance with program requirements.

We can help.

Freed Maxick’s State and Local Tax (SALT) team is among the nation’s leaders when it comes to assisting taxpayers with voluntary disclosure and compliance.

Contact a member of the Freed Maxick SALT Team here for a no cost consultation.

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