Tax Amnesty for Indiana: pay it while it's not the hot-seat of back penalties and interest

Amnesty is coming back to Indiana. Tax amnesty. Tax Amnesty 2015 is scheduled to run from Sept. 15 to Nov. 16.

Some people may misunderstand what’s meant by tax amnesty. It’s not that taxes don’t have to be paid; rather, it’s an opportunity for taxpayers to make payments on past-due taxes, “free of penalty, interest, and collection fees,” as announced to the state’s CPA firms by Katie McLear of the Indiana Department of Revenue.

This includes some 40 taxes ranging in size and description from a riverboat admissions tax to adjusted gross income tax. The thinking is that if a taxpayer has fallen behind in payments, he or she might continue to avoid paying so as not to get slammed with the extra costs listed above, and more. The “more” was covered in an Indiana Department of Revenue news release:

“In return for the full payment of the base tax, the state will:

• Waive penalties, interest, and collection fees for eligible liabilities;
• Release tax liens that have been imposed on existing liabilities; and
• Not seek civil or criminal prosecution against any individual or entity.”

There are taxpayers who have been willing to run the risk of being caught rather than be hit with any or all of the bullet-pointed items listed above. The government’s risk is that it might never find, or collect, those taxes.

Amnesty gives a grace period for both sides to get something. The taxpayer avoids the extra costs, and the state government has money flowing into its coffers to spend that it otherwise might never have seen.

Indiana’s first tax amnesty was in 2005, and delinquent taxpayers coughed up some $244 million. The Indiana Business Journal article on Tax Amnesty 2015 reported that Indiana revenue department has identified $400 million in outstanding tax debts.

Indiana Gov. Mike Pence signed Tax Amnesty 2015 into law in May. Unfortunately for scofflaws who took advantage of the 2005 amnesty and rolled the dice again thinking they’d either avoid taxes or get in on another amnesty, they’re not eligible to participate in Tax Amnesty 2015.

If you are in the category of Indiana residents or businesses who’ve been sitting on an unpaid tax bill – and don’t wish to continue the game of hide-and-seek – talk to your accountant (or Rodefer Moss) and get your questions answered about Tax Amnesty 2015.