Monday, March 8, 2010

PA Offers Tax Amnesty

If you owe the state back taxes you may want to hold off on sending a check until April 26th. That is when the Pennsylvania Department of Revenue will launch a Tax amnesty program. During a 54-day window all penalties and half the interest will be waived for business and individuals that fell behind. The state is expecting to take in an additional $190 million during the amnesty period. Pennsylvania lawmakers were spurred into launching the effort after watching New Jersey take in $725 million in a similar effort that spanned six weeks last year. Pennsylvania last offered an amnesty program in 1996. Critics of such amnesties say they can undermine tax law compliance if used too often. In an effort to address those concerns the program includes a few stipulations. Participants who become delinquent on their taxes within two years after claiming amnesty may be required to pay the full penalties and interest that had been waived and they will be barred from any future amnesty programs. For those tax scofflaws that do not take advantage of the amnesty offer a special, "nonparticipation penalty" of 5 percent will be added to any penalties and interest they have already accrued.

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