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May 10, 2012

REMINDER: Use Tax and General Tax Amnesty Programs

Hello everyone.  As the tax attorneys at Nardone Law Group, LLC have previously communicated in our September 26, 2011 blog entry Ohio Use Tax Amnesty and Other Voluntary Disclosure Options, the Ohio Department of Taxation issued an Information Release providing guidance on the Consumer's Use Tax Amnesty Program that runs from October 1, 2011 through May 1, 2013. The Tax Commissioner will waive all unassessed Use Tax liability due for any periods prior to January 1, 2009, and Consumer's Use Tax paid under the Amnesty is not subject to interest, or civil or criminal penalties. But, taxpayers who are registered for Ohio Use Tax as of June 1, 2011, are required to pay interest on any under-reported or unreported Consumer's Use Tax.

The Ohio Department of Taxation also issued an Information Release on the General Tax Amnesty. The General Tax Amnesty covers taxes due and payable as of May 1, 2011, which were unreported, underreported, and remain unpaid.  The General Tax Amnesty program is open from May 1, 2012 to June 15, 2012.  The General Tax Amnesty requires taxpayers to fully pay all delinquent taxes due for all periods prior to May 1, 2011. The benefits are:

  • The taxpayer need only pay one half of the interest that would otherwise be due on such prior delinquent taxes—the other one half of the interest is abated.
  • Any penalties on delinquent taxes paid under this program are fully abated.
  • Participants cannot be criminally prosecuted.
  • No assessments may be issued by ODT with respect to any tax paid under the General Tax Amnesty Program.

To complicate things for Ohio taxpayers, ODT also has the Voluntary Disclosure Program, which is an ongoing program, and is available for various tax years for which a taxpayer may have a liability. Although the benefits and terms may vary depending on the type of tax, the general benefits and terms include:

  • The taxpayer must file the relevant tax returns for the current year and each of the three previous years (four years in total) and pay the tax due plus interest.
  • The Tax Commissioner is precluded from assessing the taxpayer, or from requiring the taxpayer to file returns for taxable years prior to the years covered by the agreement if the taxpayer has not been previously contacted by ODT.
  • The Tax Commissioner will waive all penalties associated with the years covered by the agreement.

Prior to availing yourself of either: (i) the Use Tax Amnesty, (ii) the General Tax Amnesty, or (iii) the Voluntary Disclosure Program, you must consider the benefits of each, and also determined the potential unattended consequences of making the disclosure.  For more information, please also visit our recent article on the Ohio Tax Amnesty Programs. Also consider reviewing the Ohio Department of Taxation's discussion on each of these options.

The tax attorneys at Nardone Law Group represent businesses and individuals in state and federal tax issues, including federal tax collection alternative resolutions.  If you are dealing with a local, federal or state tax issue, you should contact an experienced tax attorney today.  Nardone Law Group’s tax lawyers and professionals have vast experience representing clients before the Ohio Department of Taxation and the IRS. We will thoroughly review your case to determine what options and alternatives are available, including the programs discussed in this article. Contact us today for a consultation.

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May 10, 2012

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