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Wednesday, May 06, 2015

Ind. Gov't. - "Tax scofflaws get chance to pay without penalty"

According to this Sept. 3, 2005 ILB post, 2005 was the last time that Indiana had a tax amnesty program.

As Maureen Hayden of CNHI reports today, the 2015 General Assembly has granted delinquent taxpayers a new opportunity. The story begins:

INDIANAPOLIS — Tax evaders are in for a deal. If they’re willing to own up and pay up, the state will waive penalties and interest on their delinquent tax bills.

Analysts say money generated by a tax amnesty program passed by the General Assembly before session's end last week could top $100 million — one-quarter of the back-taxes owed to Indiana by individuals and businesses across the country.

Details of the program, including when it will kick off, are still in the works. Lawmakers decided it has to be done before the end of next year, during an eight-week window in which errant taxpayers can settle up or arrange a payment plan with the state.

“It’s a win for both sides,” said Rep. Todd Huston, R-Fishers, a co-sponsor of the measure that was included in the $31 billion biennial budget. “It gives delinquent taxpayers a chance to catch up, and it accelerates our tax collections.”

There’s a catch for taxpayers, though. The amnesty will only apply to errant taxpayers who owed money to the state before Jan. 1, 2013.

The program takes a carrot-and-stick approach. For most delinquent taxpayers, the state will waive penalties, interest and the threat of legal action. For those who refuse the amnesty offer, the state will double the penalties owed on their back taxes.

Some late-payers won’t qualify, including those against whom the state has already initiated criminal action.

State officials don’t know how many taxpayers are eligible or how many will take part. But they do know $400 million in back taxes are owed to the state, dating from before Jan. 1, 2013.

The last time Indiana offered a tax amnesty, in 2005, more than 98,000 taxpayers took part.

The first such program in the state’s history, the 2005 program was expected to recover about $65 million of $1.5 billion in back-taxes owed to the state when former Gov. Mitch Daniels took office.

It exceeded revenue collectors’ wildest dreams, taking in more than $244 million, including payments from 38 taxpayers who handed over more than $1 million each.

The majority of those who participated owed and paid less than $1,000.

Posted by Marcia Oddi on May 6, 2015 12:14 PM
Posted to Indiana Government