As the economy falters, local governments also are feeling the pinch since tax revenues decline. Virginia and Maryland had two-month tax amnesty windows last year. Now it’s the District of Columbia’s turn.
Running August 2 to September 30, 2010, under the temporary tax amnesty taxpayers who owe taxes to DC will be able to pay without penalties. No questions asked.
The savings can be substantial, especially if no return was ever filed, since there are “failure to file” penalties, as well as “failure to pay” penalties. With interest and penalties, the effective growth rate of a tax debt can be approximately 25 percent a year!
DC’s new tax amnesty initiative indicates there will be no criminal tax prosecution. But, if under the facts of your situation, there is any possibility the government could make a case for PURPOSEFUL tax evasion, you may want to consult counsel before coming forward. Interest will not be waived, and usually cannot be under the law.
The types of taxes qualifying for the amnesty are:
- Gross receipts (a business tax)
- Toll communications
Real property tax does not qualify.
The website has a handy interest calculator to add up your the total you owe once you’ve figured your tax.
Note that the information will be shared with the federal government, so expect a bill from IRS that you will have to deal with.
If the dollar amount is still too large for you, even with the amnesty, call our office for an appointment.
As a DC tax attorney, we can discuss options to help you fix your tax problems.