PHOENIX – Arizona officials will open a monthlong tax amnesty program in May that will allow individuals and businesses to save on interest and penalties while paying back taxes.
The Revenue Department on Friday outlined the amnesty program, which was authorized by the Legislature and Gov. Jan Brewer in January as a part of a midyear budget-balancing plan.
The amnesty program will run from May 1 through June 1 and permit the filing of past-due tax returns with no civil penalties and a reduced amount of interest. The total tax liability must be paid in full with the amnesty application or by June 1, the department said.
Tax periods covered by the amnesty vary by the type of tax, the department said.
The department said the program’s goal “is to offer relief and a fresh start” to taxpayers who underreported or failed to file their state taxes.
“Many times, taxpayers get behind in their taxes for reasons beyond their control,” Revenue Department Director Gale Garriott said in the announcement. “The purpose of the tax amnesty is to give these taxpayers a second chance.”
The budget-balancing plan anticipated $5 million in increased state revenue from the amnesty in the current fiscal year, which ends June 30. It closed a $1.6 billion shortfall in the then-$9.9 billion budget, which has been undermined by the recession’s impact on tax collections.
The $5 million in anticipated revenue is much less than the $73 million collected in the state’s last amnesty program in fall 2002.
Department spokesman Anthony Forschino said that’s largely because the previous window covered 20 years, not the seven covered by the 2009 version.
The amnesty program will be a challenge to conduct because the department has laid off hundreds of workers, Forschino said. “It’s going to be tough but we have to do it.”
He said department officials will reassign personnel temporarily to review the amnesty applications and revised tax returns promptly upon receipt so that the applications are accepted within the monthly period and to credit the money to state accounts in the current fiscal year.
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