New Jersey Governor Phil Murphy recently signed a law directing the Division of Taxation to create a tax amnesty program.
The tax amnesty program, which began November 15, 2018 and will end January 15, 2019, provides an opportunity to file past due tax returns, pay back taxes, and pay half the interest due as of November 1, 2018.
The other half of the interest due as of November 1, 2018 and any late payment penalty, late filing penalty, cost of collection, delinquency penalty or recovery fee will be waived. Civil fraud and criminal penalties will not be waived. Amnesty applies to tax liabilities incurred for tax returns due on or after February 1, 2009 and prior to September 1, 2017.
The state has already begun an outreach program, sending letters to businesses and individuals, inferring that they may be subject to a forthcoming audit. This appears to be an attempt by New Jersey to prompt voluntary payments under the program.
Taxpayers that previously filed an appeal related to a tax assessment may participate in the program provided they withdraw the appeal. Any payments made are non-refundable.
Taxpayers eligible for amnesty, but who did not avail themselves of the program, will be subject to an additional 5% penalty on tax balances remaining after the amnesty period ends. This additional penalty cannot be waived or abated.
The New Jersey Tax Amnesty Program provides a great opportunity to become current with one’s New Jersey tax liabilities at a reduced cost.
Contact your Mazars USA LLP tax professional for further information.