So did you happen to “forget’’ to list some of your income on your state tax return?
Claim some deductions to which you were not entitled?
Or neglect to file a return at all?
You’re going to have a chance to get right with the government. And it won’t cost you as much as it otherwise might.
But you’re only going to have a brief window to do it. The program starts on Sept. 1. And it runs for just 30 days.
The tax amnesty program, approved by lawmakers earlier this year as part of the package to balance the budget, covers the income taxes due for 2004 through 2009.
Those who file the necessary paperwork — and, of course, pay what is owed — will not be charged the normal penalties, which can hit 25 percent for each year a return was not filed.
There will be interest. But it will be only 3 percent per year, about half the normal rate.
A similar program is available for businesses who, for whatever reason, did not pay the state what they owed in sales taxes or neglected to forward to the state what they withheld from worker paychecks.
Anthony Forschino, assistant director of the state Department of Revenue, said he expects that some of those seeking amnesty will be those who got a notice from the Internal Revenue Service that they did not properly account for all of their income. That affects what they owe the state, as Arizona is a “piggyback’’ state, with the computations for state taxes starting with the federal adjusted gross income.
He also pointed out that there are some items that are not taxable under federal law but are subject to Arizona taxes, such as interest received from municipal bonds issued by governments from other states.
And then there are those who did not file at all.
“You find somebody who knew they owed and didn’t file and then waited until the next year,’’ he said. At that point, Forschino said, the taxpayer may have figured that, being a year behind, he or she probably should not file again.
“And it snowballed,’’ he said.
Lawmakers are hoping to generate $22 million from the program.
That, however, may not be realistic.
Two years ago the Legislature approved a similar program. More than 700 taxpayers took advantage of that month-long window, coughing up close to $20 million.
But that program also covered a five-year span, from the 2002 through 2007 tax years. That means this latest effort actually covers much of the same period.
Forschino said he could not say whether there are any taxpayers out there who were eligible for the 2009 amnesty, did not take advantage of it at the time, but now might be convinced to come forward.
A previous amnesty program in 2002 generated $73 million, largely from corporations that acknowledged they owed state income taxes. But that amnesty covered a much longer period: 20 years.
Not everyone who might owe taxes is eligible for amnesty. Individuals and businesses that already have received a billing or tax notice from the Department of Revenue cannot participate. Nor can those who already have a payment arrangement with the state or those who are already involved in a criminal case over unpaid taxes.
Also ineligible are those who have already been through a full-blown audit that has become final. But Forschino noted that those still in the middle of an audit can pay up and get the favored interest and penalty treatment.