New Jersey Tax Amnesty

The mail these days both the old-fashioned kind that gets stuffed in your mailbox as well as the e-mail that fills your computer brings advertisements for 2% off on your groceries, 5% on your gas and 25% off your clothing, jewelry and the other stuff of life. It is the advertising and marketing people of the world who do their damnedest to create desires for things we really don't need. But the State of New Jersey knows well that people can't really resist a sale. So listen up. Your favorite New Jersey Division of Taxation at P.O. Box 286, Trenton, NJ or a regional office located nearby is putting tax liabilities on sale through November 17, 2014 . Like the local gas station that offers a discount for cash over credit card payment the state is attempting to raise as much hard cash as possible with its newest version of a tax amnesty. By the time you are reading this the state has most likely already sent letters to your clients, both businesses and individual, who owe back taxes informing them that the sale is going on. The details can be found at the New Jersey Division of Taxation website, but in essence it requires the filing of a “closing agreement” for open tax liabilities. A closing agreement is a contract that both the taxpayer and the Division sign which states the taxpayer will pay and the Division will accept an amount that reflects reduced or limited penalties with no cost of collection or recovery fees in full and final satisfaction of an outstanding tax liability. Also the tax liability will not be subject to further audit and no refund can be claimed by the taxpayer in the matter. The Division of Taxation will send schedules to taxpayers offering a reduced amount of tax liability, where penalties may be reduced to zero and costs of collection eliminated. Interest will be calculated only on the tax and any reduced penalties. In addition recovery fees may be waived. Now the catch is that the full amount due must be paid by November 17, 2014 in order to take advantage of the reduced penalties and removal of costs of collection and recovery fees. If taxpayers do not pay the balance due by November 17, the tax and all penalties and interest, cost of collection and recovery fees will remain due. Naturally, the Division threatens that it will then pursue further collection activity. This program may also apply to taxpayers who have not filed their tax returns. If a taxpayer believes they should be subject to this amnesty and have not received the reduced payment schedule contact should be made directly with the Division of Taxation, either by mail or at 609-943-5000. This sale is for a limited time only and only as long as supplies last. By the way it does not apply to federal tax returns. At least not yet.