Alabama Tax Amnesty Program starts Thursday!
By: Kim Smith, CPA, Tax Shareholder
If you or your business have qualified delinquent taxes or returns due to the Alabama Department of Revenue, you may qualify for the Tax Amnesty Program, which has substantial interest and penalty savings. The application period for the Amnesty Program will be open from June 30 and will run through August 30, 2016.
You may qualify as an eligible taxpayer if you have not been contacted by the Department within the last five years, do not have an outstanding debt with the Department, have not been scheduled for an audit, are not currently under investigation, and have not entered in to a Voluntary Disclosure Agreement with the Department before June 30, 2016.
A taxpayer who enters the program will receive a waiver of half (50%) of the interest and ALL of the penalties associated with the eligible taxes. There will be a three-year look back period and the returns and payments are due within 90 days of approval. The three-year look back does not apply to taxes collected and held in trust. For example, if a business collected sales taxes from a customer from 2005 and did not remit them to the state of Alabama, those taxes would still be due to the Department under the Amnesty Program. Payments for taxes due are required to be certified funds and no installment agreements are permitted.
Most taxes administered by the Revenue Department, with the exception of motor fuel taxes, are eligible for the program. This includes corporate and individual income, business privilege, excise, consumers use, sellers use, withholding and sales taxes.
This may be an excellent time to clear up any delinquent state tax issues you or your business may have. If you would like assistance with the Amnesty Program or have any questions regarding possible outstanding liabilities, please contact your JMF tax professional or visit the Amnesty Program web site at www.alabamataxamnesty.com.
Timely Points of Particular Interest
IRS Is Hiring — Due to budget cuts and strains on resources, IRS examinations have been going down in recent years, hitting a low of 0.84% last year. But IRS Commissioner John Koskinen recently announced that the agency found enough money in the budget to hire as many as 700 new staffers. Most of the new hires are expected to be conducting audits or coordinating audit efforts with other agents.
Hair-Raising Experience — Generally, if you engage in an activity as a hobby rather than a business, your deductions are limited to the amount of income from the hobby. However, if the activity is a business, you can deduct a loss. A taxpayer in a new case convinced the Tax Court that her hair-braiding salon was a business, although she was assessed an accuracy-related penalty for inadequate records.
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