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Connecticut Tax Amnesty Program Proposed

Publisher: Day Pitney Alert
May 28, 2013
Day Pitney Author(s) Charles H. Lenore

Legislation pending before the Connecticut General Assembly would establish a tax amnesty to run from September 16, 2013, through November 15, 2013. The "carrot" being offered under the amnesty program is a 75 percent reduction in the interest due -- from 12 percent per year to 3 percent -- which could represent substantial savings. In addition, all civil penalties will be waived and no criminal prosecution will be sought. (Filing for amnesty constitutes a waiver of all rights of appeal or to claim a refund, however.)

If you have a matter pending before the Department of Revenue Services (the "Department") that is likely to conclude soon, you may want to wait to see if the amnesty is enacted. (The regular legislative session ends on June 5, 2013, but it is not clear if the budget issues, of which amnesty is a part, will be resolved by then.)

In a change from prior Connecticut amnesties, taxpayers will be eligible even if they currently are under audit or have been notified of a pending audit. The amnesty will apply to all Connecticut taxes other than the Motor Carrier Road Tax.

Amnesty will not be available to any person who (i) is a party to any criminal investigation or to any civil or criminal litigation that is pending on July 1, 2013; (ii) is a party to a closing agreement with the Department; (iii) has made an offer of compromise that has been accepted by the Department; or (iv) is a party to a managed Sales and Use Tax audit agreement.

The proposed amnesty also contains a "stick." Any person owing a tax for a period ending on or before November 30, 2013, that has not filed an otherwise required return and that does not file for amnesty with respect to that period shall be subject to an additional non-waivable penalty of 25 percent of the tax owed for such period.

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