Tax Amnesty - Forgiveness in Exchange for Payment

Tax Amnesty is a tax collecting organization's offer to forgive any penalties or criminal charges to those who have past due taxes if they come forward and voluntarily pay the taxes themselves. The federal government, or IRS, currently doesn't offer a complete tax amnesty program to those who have filed late tax returns or who have failed to file tax returns. If you work with an attorney who specializes in tax matters, however, you may be able to get penalties and fees reduced even if they aren't eliminated.

Many States Offer Tax Amnesty

Tax amnesty is usually a “limited time offer” made by a state giving all taxpayers a period of a few months during which they can file their back taxes and pay just the money originally owed. In most states, during the amnesty period no penalties or fees are charged and in some states even the interest on the original taxes are waived. The particular structure of a tax amnesty varies from state to state.

Tax amnesty has become increasingly popular because it quickly raises a lot of revenue in a short amount of time. It also brings a lot of taxpayers back into compliance and adds them to the tax rolls. Many of these people may not have filed for years, so having their updated information increases the state's efficiency and ability to collect in the future.

For those seeking tax amnesty, it can restore credit, remove liens from properties and remove the burden of looming debt and the fear of future problems with the IRS. Any time a state offers a limited time tax amnesty, the response is generally overwhelming. A few states also offer ongoing tax amnesty in certain situations; that is, they will grant amnesty no matter when you file your back taxes if you meet certain criteria outlined by the state.

Many people in the United States government have proposed a general tax amnesty for federal taxes, but at this time there is not one being offered, although (as mentioned earlier) penalties can be reduced on a case by case basis. For this reason, and because other tax amnesty programs vary from state to state, you should consult a tax law specialist to be sure you follow the proper procedures to get the tax amnesty you are eligible for.