The title of this week’s post is frequently attributed or misattributed to the twentieth President of the United States, James Abraham Garfield (As he pulled it from the Bible). Regardless of who said it first, I find it very relevant as applied to the smorgasbord of voluntary disclosure programs offered by the various state and local taxing jurisdictions. For those of you old enough to remember smorgasbords (current translation is “the cocktail hour”), while many of the offerings seem identical, like the various voluntary disclosure programs, it is essential to be aware of the specifics of what is being offered up.
While voluntary disclosure programs are a great way for taxpayers to get back on track and stop worrying about taxes and focus on running their business, sometimes the State forces your hand, for better or worse. In the case of New Jersey’s new amnesty program, I believe it is for better.
The exact start date of the program has not yet been determined, but it will be sometime between November 1, 2018 and December 31, 2018. The benefits of the program? While taxpayers will need to pay 100% of any tax due:
Those who decline to participate will be assessed an additional 5% penalty on any tax that amnesty would cover.
This program applies to most taxes administered by the Division of Taxation. Eligible tax periods are for tax returns due on or after February 1, 2009 through September 1, 2017.
Amnesty programs are great, but taxpayers should not forget the multitude of voluntary disclosure programs offered by most states. New Jersey is certainly incentivizing taxpayers with both the interest rate reduction (almost never done) as well as the additional penalty for not participating if you were eligible.
We have barely touched the surface of the New Jersey program, let alone other jurisdictions. The takeaway here is if that you believe you may owe back taxes, speak to your Berdon Advisor. We are experienced in gathering the right team of professionals to minimize the misery of the process. If I can be reached at WBerkowitz@BerdonLLP.com or your Berdon advisor.
Wayne Berkowitz, a tax partner and head of the State and Local Tax Group at Berdon LLP, advises on the unique requirements of governments and municipalities across the nation.