Alabama Enacts 2018 Tax Amnesty Program

Alabama has enacted a tax amnesty program that will take place July 1, 2018 through September 30, 2018. The amnesty program will apply to all taxes administered by the Alabama Department of Revenue (DOR) except for motor fuel, motor vehicle, and property taxes. The program applies to taxes due prior to January 1, 2017 and taxes for taxable periods that began before January 1, 2017. Under the program, all interest and penalties associated with the tax periods for which amnesty is granted will be waived. However, penalties may be imposed for reasons such as failing to comply with the amnesty provisions, providing false or fraudulent information, and/or cost of collection penalties.A look-back period of three full tax years, or 36 months, applies separately to each tax type. If a taxpayer has collected any tax and not remitted it to the DOR, the look-back period will be extended to include all periods, back to the point of collection. Eligible taxpayers participating in the program must comply with the following requirements:

• Submit to the DOR by November 15, 2018, all applicable returns, supporting documentation, and the full payment of the tax. No payment plans will be entered into for taxes that are approved for amnesty.
• Include the current year return with the amnesty returns filed for the eligible tax type. Penalties for failure to timely file a return and failure to timely pay will be waived. Waiver of interest does not apply to current year returns.

In order to participate in the program, the taxpayer must agree to waive any right to protest or initiate an administrative or judicial proceeding. The agreement only applies to the specific tax and the tax period for which amnesty is granted. Amnesty applications need to be submitted in an electronic manner as prescribed by the DOR.

Taxpayers are not eligible to participate in the amnesty program if any of the following conditions apply:

• The taxpayer is a party to a criminal investigation or criminal litigation pending as of March 6, 2018 for nonpayment, delinquency, or fraud in relation to any state tax imposed by Alabama and administered by the DOR;
• The taxpayer has delivered or disclosed a false or fraudulent application, document, return, or other statement to the DOR in connection with an amnesty application;
• The taxpayer has been issued a final assessment in which the appeal period has ended;
• The taxpayer has entered into a voluntary disclosure agreement with the DOR before December 31, 2017; or
• The taxpayer has been granted amnesty for the tax type as part of the Alabama Tax Delinquency Amnesty Act of 2016.

(Act 2018-153 (H.B. 137), Laws 2018, effective March 6, 2018)