During 2009, numerous states had tax amnesty programs that prompted a good response from taxpayers who knew they owed taxes but were afraid to come forward without some type of protection.
For 2010, Massachusetts seems to be the first state to announce its intention to have an amnesty program for 2010. The details have not been published yet, but here is what we know:
1. All payments for tax must be made by June 30, 2010
2. The program will only last for 2 months.
3. Penalties will be abated.
4. Taxpayers who are eligible but fail to participate in the amnesty program will be assessed an additional $500 penalty if they are audited or attempt to come forward after the program expires.
What to do now?
Because this program expires June 30, 2010 that must mean the actual amnesty program will be early in the year. Maybe March, April, or May). With only a two month time frame, companies must be ready to go once the state announces the details of the program. There will be little time for gathering data and for identifying the risks. Without a disclosed "look back" period, it will remain a bit uncertain how much data you will need to process to determine the correct exposure.
I would also expect other states to be announcing amnesty programs or other incentives for companies to come forward during 2010. We will keep you posted as we hear of additional opportunity.
If you have liabilities, don't wait for an amnesty. Consider the voluntary disclosure. You may get the same or even better treatment under the VDA as you would the amnesty programs.
