| Recent economic downturns have not only | | | | taxpayer under pretrial intervention or a diversion |
| affected U.S. business but have also dramatically | | | | program, probation, or community control or in a |
| altered the landscape by which state and local | | | | work camp, jail, state prison, or another |
| governmental authorities operate. In an effort to | | | | correctional system regarding a revenue law of |
| generate revenues necessary to fund state and | | | | this state is not eligible to participate in the |
| local governmental operations, many states have | | | | amnesty program. |
| increased state and local tax rates, enforcement | | | | Can Qualifying Taxpayers Pay In Installments? |
| and collection efforts. Florida is no exception. | | | | Yes. In lieu of making full payment, qualifying |
| From time to time, federal, state and local | | | | taxpayers can often make payments under a |
| governments offer certain incentives to | | | | short-term stipulated payment agreement. The |
| taxpayers in an effort to increase or facilitate the | | | | general terms are a minimum down payment of |
| collection of tax revenues. These incentives may | | | | 12.5 percent of the outstanding amount due and |
| include an economically feasible structure of | | | | the agreement to pay the remaining balance in up |
| installment payments, the settlement of tax debt | | | | to seven additional monthly installments. In certain |
| for a lesser amount, a reduction or elimination of | | | | limited circumstances under the discretion of the |
| penalties and even interest. | | | | Department of Revenue, more favorable terms |
| To this end, the State of Florida recently enacted | | | | may apply. However, if the taxpayer fails to |
| a tax amnesty program designed to generate | | | | make a monthly installment payment or is |
| revenues in a settlement of taxes that are, or | | | | delinquent, the agreement to participate in the |
| may be, owed to the State of Florida. | | | | amnesty program and the stipulated payment |
| What Are the Benefits of the Tax Amnesty | | | | agreement are void and the full amount of the |
| Program? | | | | original liability, including any interest and penalty, |
| The tax amnesty program is a one-time | | | | are due and payable. |
| opportunity for eligible taxpayers to satisfy their | | | | Commentary |
| tax liabilities and avoid criminal prosecution, | | | | For certain taxpayers, the provisions of the |
| penalties, and interest. Specifically, tax penalties | | | | amnesty program may be quite favorable. For |
| cannot be imposed and the Department of | | | | others, the program may not provide a large |
| Revenue may not initial a criminal investigation or | | | | enough incentive to move ahead. In this writer's |
| refer for prosecution any participating taxpayer. | | | | opinion, the tax amnesty program is "a dollar |
| As an added incentive, taxpayers may receive a | | | | short and a day late"; typical for programs |
| reduction of 25% or more of the interest that | | | | offered by the State of Florida. Other state and |
| may be assessed. What are the Time | | | | Federal programs are of the realization that |
| Restrictions? The tax amnesty program is limited. | | | | underreporting and tax delinquencies are often |
| This program in effect for a 3-month period from | | | | due to economic hardships - hardships so intense |
| July 1, 2010 through September 30, 2010. | | | | that business owners believe they have little |
| What Taxes Apply? | | | | choice but to underreport or not pay taxes in an |
| The program includes most Florida taxes excluding | | | | effort to keep their business alive. It is not that I |
| employment taxes. Specifically, the program | | | | am in agreement with this logic - in fact I strongly |
| includes state and local taxes imposed by | | | | object and would always advise otherwise. Yet in |
| chapters 125, 175, 185, 198, 199, 201, 202, 203, | | | | the minds of business owners, they often believe |
| 206, 211, 212, 220, 221, 252, 336, 376, 403, 624, | | | | that they have no choice but to delay the |
| 627, 629, and 681 of the Florida Statutes. | | | | reporting or payment of these taxes; the |
| How Can You Apply? | | | | situation is only temporary and will eventually turn |
| In order to participate in the amnesty program, | | | | around, and; they have every intention of making |
| eligible taxpayers must file the forms and other | | | | good on the debt. Unfortunately, in many cases, |
| documentation specified by the Department of | | | | the problem seems to continue or otherwise |
| Revenue, including but not limited to, tax returns | | | | pyramid into future periods. Due to the inability to |
| and amended returns, and must agree to make | | | | timely enforce compliance and collection actions |
| full payment of taxes due, interest and | | | | by the overworked, understaffed workers of the |
| administrative collection processing fees. | | | | Florida Department of Revenue, often these |
| Who Can Apply? | | | | conditions persist until the point of no return. |
| The availability of the program to qualifying | | | | What Are The Recommended Actions? |
| taxpayers is significant. Taxpayers may | | | | In all cases, taxpayers should consult first with |
| participate in the amnesty program whether or | | | | their tax attorney, certified public accountant or |
| not the taxpayer is under audit, inquiry, | | | | financial advisors to quantify their exposure and |
| examination, or civil investigation initiated by the | | | | determine if the benefits of the program is |
| Department of Revenue, regardless of whether | | | | economically sound. In those cases where |
| the amount due is included in a proposed | | | | taxpayers have the ability to pay delinquent or |
| assessment or an assessment, bill, notice, or | | | | underreported taxes, either currently or through |
| demand for payment issued by the Department | | | | the use of a short term payment plan, the |
| of Revenue, and without regard to whether the | | | | benefits of the tax amnesty program may indeed |
| amount due is subject to a pending administrative | | | | be worth consideration. In those cases where |
| or judicial proceeding. When the department has | | | | taxes are due and it is imminent that the |
| issued a notice of intent to conduct an audit to a | | | | taxpayer will be examined, it is most certainly in |
| taxpayer but has not commenced the audit, the | | | | the taxpayer's interests to participate in the tax |
| taxpayer may apply to the department during the | | | | amnesty program and to voluntarily disclose the |
| amnesty program for approval to have the audit | | | | obligations and apply for economic relief. In those |
| converted to the certified audits program | | | | cases where criminal charges may apply, it is |
| authorized by s. 213.285, Florida Statutes. | | | | always our recommendation to consider the |
| Who is Excluded? | | | | seriousness of such potential exposure and to |
| The following taxpayers are excluded: Any | | | | immediately cease and desist such actions going |
| taxpayer that has entered into a settlement of | | | | forward at all costs at a minimum. In those |
| liability for state or local option taxes before July | | | | circumstances in which it is, or may appear, that |
| 1, 2010, whether or not full and complete | | | | discovery is imminent, I believe that immediate |
| payment of the settlement amount has been | | | | action in the consideration of such a plan is |
| made, is not eligible to participate in the amnesty | | | | warranted. This may indeed be your best |
| program. A taxpayer under criminal investigation, | | | | opportunity to successfully settle these matters |
| indictment, information, or prosecution regarding a | | | | with the added incentive of beneficial economic |
| revenue law of this state is not eligible. A | | | | terms. |