Tax amnesty programs offer a unique chance for taxpayers to settle outstanding liabilities with reduced penalties and interest but not all programs are created equally.
Tax amnesty programs are special opportunities offered by governments to encourage taxpayers to settle their outstanding tax liabilities. In exchange for voluntarily coming forward to clear past tax obligations, taxpayers typically receive penalty and interest reductions.
Taxpayers who meet eligibility criteria for specific amnesty programs at the federal and state levels have a limited window of availability in which they can pay back taxes and benefit from reduced penalties and interest. For example, Massachusetts launched a tax amnesty program on Nov 1, 2024. This program runs through Dec 30, 2024, and allows eligible taxpayers to request a waiver of penalties on outstanding taxes and interest paid during the amnesty period. Contact the state at contact@salestaxandmore.com or work with your TaxOps advisor to start the process by obtaining an eligibility letter.
- Taxpayers with eligible existing tax liabilities submit an Amnesty Request, with personal information, the Letter ID, and a valid payment method (e.g., bank account information, credit card).
- Taxpayers filing a new return to report a tax due must complete their return to calculate amount due before completing an Amnesty Request using the information from the return.
- Taxpayers filing an amended return to report an increase in tax must complete their amended return to calculate amount due. Once completed, the taxpayer will need to sign on to their MassTaxConnect account to complete an Amnesty Request using the information from the amended return.
In general, a Voluntary Disclosure Agreement (VDA) is better than amnesty due to its limited look back period. However, this amnesty has one as well making it a great option for those eligible.
Got questions about which is better for your business tax situation? Reach out to your TaxOps Advisor.
Massachusetts Amnesty FAQs: here.
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