New York State Grants Taxpayers Amnesty

Commissioner Discusses Delinquent Taxpayer Program at Nassau Chapter Meeting

By Marietta E. Gentles

Taxpayers will receive a “second chance” to satisfy outstanding liabilities as the New York State Department of Taxation and Finance prepares to offer qualified participants the opportunity to settle tax debt accrued on or before Dec. 31, 2000, without administrative penalties or criminal prosecution.

“It’s a tremendous incentive. It’s not only an incentive to save, but an incentive to be granted immunity,” New York State Tax Commissioner Arthur J. Roth recently said of the state’s latest Tax Amnesty Program.

Guest speaker at the Sept. 25 meeting of the Nassau Chapter’s Joint Committee of Attorneys and Accountants, Roth briefed the attendees on aspects of the delinquent taxpayer program announced this summer. The program, which has yet to take effect, will waive the 2-percent interest rate increase, as well as other penalties, for eligible participants who want to wipe the slate clean of their tax debt.

Taxes for which amnesty will be applied include personal income tax, sales and use tax, corporate franchise tax (excluding the bank and insurance tax) and estate tax, as well as others. However, eligible participants must pay their debt in full by March 31, 2003. All applicable pre-amnesty interest rates will increase by 2 percent after the deadline, along with any other penalties.

“It’s an opportunity to resolve New York state tax matters that fall within the amnesty guidelines…I think the amnesty program is going to benefit many,” said Karen J. Tenenbaum, co-chair of the meeting that took place at the Chateau Briand in Carle Place, N.Y., and attorney with Karen J. Tenenbaum P.C. in Melville, N.Y.

Although the amnesty program will attract taxpayers who want to benefit from the proposed waiver of penalties, “it isn’t for everyone,” Roth noted.

There are certain restrictions that apply to the program. Taxpayers who are under criminal investigation or who have been convicted of a tax-related crime are not eligible to apply. Taxpayers who are parties to administrative proceedings with the tax department or businesses with more than 500 employees are also excluded from the program.

Tax amnesty is hardly a new concept in New York state. In 1994, the state authorized a tax amnesty program geared toward non-New York residents, out-of-state taxpayers and resident individuals and small businesses. There also was a 1996 broad-based amnesty program that gave taxpayers another opportunity to settle unpaid taxes without penalties.

Taxpayers who are willing to come forward with their tax debt help the state collect millions in unsettled liabilities. During the 1996-1997 amnesty program, the state’s tax department waived $88.9 million in potential administrative penalties, but gained $322.8 million in net revenues generated from the program.

The official start date for the amnesty program has not been finalized; more information is expected to be announced late this fall. For more details on the program, visit www.tax.state.ny.us.