Tax Amnesty?

Birds do it, bees do it, even educated fleas do it… No, not that. With apologies to Cole Porter. What everyone is doing is tax amnesty. When New Jersey realized it was broke what did it do? Tax amnesty. Now Pennsylvania and Virginia are getting into the act. Pennsylvania will offer an amnesty program from April 21 to June 19. The offer is to waive all penalties and one half of the interest for taxpayers with tax delinquencies as of December 31, 2015. Failing to take advantage of the offer will result in an additional 5% penalty. In Virginia, tax amnesty will begin sometime from July 1, 2017 until June 30, 2018 and is scheduled to last 60 to 75 days. Other states continue to view the windfall for their tax coffers by offering some type of amnesty program. How far in the future is a federal tax amnesty program? Certainly IRS has had a great deal of success with its offshore tax compliance program which brought billions of dollars into the federal treasury by offering reduced penalties for those who came forward without the agency spending a great deal on enforcement activity. As the IRS budget shrinks further, it would seem that some type of tax amnesty across the board to all taxpayers may in fact be warranted. None has been offered to date. But these are strange times, indeed. So tax dodgers and non-filers may soon find a welcome mat back into the tax fold. But the best advice may be to do something now just in case this amnesty stuff ends up just a pipe dream.