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Alabama Tax Amnesty Program Enacted – Tax & Accounting Blog

The Alabama Tax Delinquency Amnesty Act of 2018 has been enacted. The amnesty program will be held from  July 1, 2018, to September 30, 2018.

Eligibility for Alabama Tax Amnesty

The program applies to all taxes administered by the Department of Revenue except for motor fuel, motor vehicle, and property taxes. The taxes eligible for amnesty include:

  • taxes due prior to January 1, 2017, and
  • taxes for taxable periods that began before January 1, 2017.

Taxpayers must waive any right to protest or initiate an administrative or judicial proceeding to participate in the program. The agreement only applies to the specific tax and the tax period for which amnesty is granted. Amnesty applications will be submitted electronically.

Waiver of interest and penalties

The program waives all of the interest and penalties associated with the tax periods for which amnesty is granted. However, penalties may be imposed for various reasons, including failing to comply with the amnesty provisions, providing false or fraudulent information, and/or cost of collection penalties.

Look-back periods

A limited look-back period of the last three full tax years, or 36 months, applies separately to each tax type. If the taxpayer has collected any tax without remitting the tax to the department, the look-back period will be extended to include all periods, back to the point of collection.

Amnesty requirements

An eligible taxpayer who is granted amnesty must comply with many requirements.

Past Tax Returns

Taxpayers must submit to the department, by November 15, 2018, all applicable returns, supporting documentation, and the full payment of the tax. No payment plans will be entered into for taxes that are approved for amnesty. An amnesty payment or return submitted in a properly addressed envelope with sufficient postage delivered by the U.S. Postal Service is deemed paid or received on the date it is postmarked. An amnesty payment or return delivered by courier or taxpayer is deemed paid or received on the date it is delivered to the department’s headquarters or a regional office.

Current Year Return

In addition, taxpayers have to include the current year return with the amnesty returns filed for the eligible tax type. Penalties for failure to timely file a return and failure to timely pay will be waived. However, waiver of interest does not apply to current year returns.

Ineligible taxpayers

Tax amnesty may not be granted to a taxpayer under several circumstances.

  • The taxpayer is a party to a criminal investigation or criminal litigation pending as of March 6, 2018 for nonpayment, delinquency, or fraud in relation to any state tax administered by the department.
  • The taxpayer has delivered or disclosed a false or fraudulent application, document, return, or other statement to the department in connection with an amnesty application.
  • The taxpayer has been issued a final assessment in which the appeal period has ended.
  • The taxpayer has entered into a voluntary disclosure agreement with the department before December 31, 2017.
  • The taxpayer has been granted amnesty for the tax type as part of the Alabama Tax Delinquency Amnesty Act of 2016.

Act 2018-153 (H.B. 137), Laws 2018, effective March 6, 2018

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Author: CCHTaxGroup

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