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Conn. Offering Tax Delinquents Amnesty On Some Penalties

State Has Offered Tax Amnesty 4 Other Times Since 1992
Woman doing her taxes (Photo Credit: Thinkstock.com)

Woman doing her taxes (Photo Credit: Thinkstock.com)

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HARTFORD, Conn. (CBSNewYork/AP) – Connecticut unveiled its latest tax amnesty program, offering scofflaws a one-time discount in penalties and interest in hopes of collecting more than $35 million in back taxes to help balance the state budget.

The Department of Revenue Services is offering a 75 percent reduction in accumulated interest and will waive all penalties for individuals and businesses that have not filed, have underreported or have existing state tax liabilities for any period ending on or before Nov. 30, 2012, Commissioner Kevin Sullivan said.

“This is a time to get it done, get it clean and get a fresh start,” Sullivan said during a news conference at the state Capitol on Monday. The agency is launching a radio and online ad campaign to get the word out about the program. Also, notifications were included in DRS billing statements sent to taxpayers with existing liabilities.

Sullivan said his agency will strive to exceed the $35 million that state lawmakers estimated could be raised by the amnesty program. According to DRS, an estimated 80,000 taxpayers owe about $400 million in back state taxes, while another 80,000 have underreported or have not filed a return. Those who don’t pay in full by Nov. 15 will face either a possible 25 percent penalty, possible criminal prosecution or both. Installment plans will not be available.

“Actually going right after that first 80,000 with direct mail to them saying ‘hey this is your chance, don’t blow it,’” Sullivan told WCBS 880 Connecticut Bureau Chief Fran Schneidau.

This marks the fifth tax amnesty program that Connecticut’s tax department has launched since 1992. Sullivan said this year’s version is more far-reaching, affecting more taxpayers. Also, he said the threatened 25 percent penalty is new.

“This is an opportunity for people to catch up,” said Rep. Patricia Widlitz, D-Guilford, co-chairman of the General Assembly’s Finance Revenue and Bonding Committee, adding how taxpayers will realize “tremendous savings” by participating.

Sullivan said his department typically tracks down about $150 million a year in unpaid back taxes. He said some of the debtors are “perpetual scofflaws” who refuse to pay. Others are taxpayers disputing their tax obligations or have had a difficult time paying their taxes and lost track of how much they owe the state.

While a large percentage of the unpaid taxes stem from the personal income tax, the amnesty also applies to other taxes including the business use tax, cigarette tax, corporation business tax, gift tax, individual use tax, motor vehicle fuels tax, sales and use taxes and withholding tax. The amnesty does not pertain to unpaid local property taxes or owed federal taxes.

Taxpayers seeking amnesty must file an application electronically using the Amnesty Taxpayer Service Center at www.makeitrightct.com.

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