Connecticut and Maryland are offering state tax amnesty programs in the wake of a six-month Internal Revenue Service amnesty program for taxpayers with unpaid offshore account income. On March 23, the IRS issued directives about the federal program, which generally trims civil penalties from the greater of 50 percent of the account value or $100,000, to a one-time payment of 20 percent of the account value, or 5 percent for an inherited account. The program involves filing up to six years of amended returns.
Connecticut's tax amnesty program, which covers numerous kinds of taxable income owed for tax periods ending on or before Nov. 30, 2008, runs from May 1 through June 25. Maryland's program covers taxes due on or before Dec. 31, 2008 and runs from Sept. 1 through Oct. 31. Under both programs, participants can avoid penalties and criminal prosecution and pay lower interest on back taxes.
The most recent prior amnesty state programs were in 2007 in Iowa and Texas, according to a Maryland Department of Legislative Services report filed with the bill, which detailed the fiscal impact of such programs. The amnesty programs offer greater incentives than many states' general voluntary disclosure policies, which allow delinquent taxpayers to file missing returns or correct old returns in exchange for leniency.
Posts
