“Tax amnesty: Righting tax wrongs”

Posted on 09.07.17

“Tax amnesty: Righting tax wrongs”

Virginia Tax Amnesty Starting Soon!

The Virginia Department of Taxation has announced the dates of its tax amnesty program – September 13, 2017 through November 14, 2017. Generally, taxpayers will be entitled to waiver of penalties and one-half the interest for amnesty-eligible liabilities paid during this period. 

Terry Barrett, Keiter Senior Tax Manager, recently wrote an article published in Virginia Society of CPAs' Disclosures Magazine which summarizes most of the amnesty provisions – the article was based on draft guidelines for the program and little has changed in the release of the final guidelines


Taxes and eligible periods for amnesty:

Tax

Periods Eligible for Amnesty

Aircraft Sales and Use Tax (Dealers) Month of April 2017 and prior
Aircraft Consumer Use Tax Returns due June 15, 2017 and prior
Bank Franchise Tax Taxable Year 2016 and prior
Business Consumer's Use Tax Month of April 2017 and prior
Communications Sales and Use Tax Month of April 2017 and prior
Corporate Income Tax Taxable Year 2015 and prior
Direct Payment Permit sales and Use Tax Month of April 2017 and prior
Employer Income Tax Withholding Month of April 2017 and prior
Estate Tax Returns due by March 30, 2008 and prior
Fiduciary Income Tax Taxable Year 2015 and prior
Individual Consumer's Use Tax Returns due by May 1, 2017 and prior
Individual Income Tax Taxable Yar 2015 and prior
Inheritance Tax Remainder interests that come into possession before September 15, 2016
Insurance Premiums License Tax Taxable Years 2013 through 2016
Litter Tax Taxable Year 2016 and prior
Motor Vehicle Rental Tax and Fee Month of April 2017 and prior
Pass-Through Entity Information Return Taxable Year 2015 and prior
Recordation Tax Filings due by June 15, 2017 and prior
Retail Sales and Use Tax Month of April 2017 and prior
Out-of-State Dealer's Use Tax Month of April 2017 and prior
Watercraft Sales Tax Month of April 2017 and prior
Watercraft Consumer Use Tax Returns due by June 15, 2017 and prior

*The table above does not include all taxes that are eligible. For the complete list, refer to the guidelines on Virginia.gov.


The final guidelines also explain that the following are not eligible for amnesty:

  1. Bills and accounts paid before September 13, 2017;
  2. Federal and local tax assessments;
  3. Bills with an assessment date after June 15, 2017, with certain exceptions;
  4. All obligations of a taxpayer under criminal investigation or prosecution for filing a fraudulent return or failing to file a return with the intent to evade the tax;
  5. All obligations of a taxpayer with an active jeopardy or fraud assessment; and
  6. Any tax liability attributable to an issue that is the subject of a decision of a Virginia court rendered on or after January 1, 2016.


Conclusion

One of the key facts to remember is that no applications for amnesty are required to be filed but taxpayers must file all tax returns and related documentation, the same as they would have if the returns were timely filed.  Payment of any tax due must accompany the return.

Now is a great time to think about Virginia taxes – known liabilities as well as potential unknown liabilities (e.g., use tax as explained in the Disclosures article).  Another Virginia amnesty program may not be offered for another several years, if then.

Please reach out to Keiter’s State and Local Tax Group or your Keiter advisor with questions or for more information: 804.747.0000 | Contact us

Sources: 

Posted by: Terry Barrett, CPA

Terry Barrett specializes in state and local tax concerns for her clients. She has over 30 years of experience working in the public and private accounting sector. She is a graduate of Virginia Commonwealth University. You can read more of Terry’s state and local tax insights here.