Indiana Enacts Amnesty Program

Indiana Governor Mike Pence has signed the State Biennial Budget Bill, which requires the Indiana Department of Revenue to establish a tax amnesty program for taxpayers having an unpaid tax liability for a listed tax that was due and payable for a tax period ending before January 1, 2013. The amnesty program will take place from September 15 through November 16, 2015 and will apply to all tax types managed by the Department. Penalties, interest and collection fees on unpaid tax liabilities will be waived for qualified participants in the amnesty program. The Department will not seek civil or criminal prosecution and shall not issue or will withdraw an assessment or notice previously issued. The Department will release tax liens that have been imposed on existing liabilities. Any additional taxes due under the amnesty must be paid or a payment plan entered into before the conclusion of the amnesty program. Any taxpayer who participated inthe 2005 prior amnesty is barred from the 2015 amnesty. Any participant in the 2015 amnesty will be barred from participating in any future amnesty. Taxpayers who benefited from the Streamlined Sales Tax Amnesty program are also ineligible. If eligible taxpayers do not participate in the amnesty and additional taxes are deemed due, additional penalties will apply.

The Indiana Department of Revenue has issued emergency rules regarding the tax amnesty program. The emergency rules list the eligibility requirements and restrictions for participating in the tax amnesty program. Taxpayers with unpaid income tax, sales tax, withholding tax, inheritance tax, estate tax and generation-skipping transfer tax liabilities are eligible to participate in the amnesty program. Taxpayers who are known to be eligible will receive notice by September 15, 2015. Per the rules, an eligible taxpayer who fails to participate may be subject to a doubling of penalties owed on unpaid tax liabilities. Taxpayers can pay tax liabilities in a lump-sum payment or through an amnesty payment plan agreement. An amnesty payment plan agreement requires that the base tax due be paid in full to the department by June 15, 2016. A taxpayer who fully complies with the terms of an amnesty agreement is eligible to have his or her tax warrant(s) expunged, at the discretion of the department. The department will not expunge a warrant if it finds that the warrant was issued based on the taxpayer’s fraudulent, intentional or reckless conduct. To have a warrant expunged, a taxpayer must submit to the department an amnesty expungement request form.

For more information, you can visit the state’s amnesty program web page.

(H.B. 1001, Laws 2015, effective July 1, 2015; Governor Pence Announces Tax Amnesty to Be Conducted in Fall 2015, Indiana Gov. Mike Pence, June 29, 2015; LSA Document #15-240(E), Indiana Department of Revenue, July 27, 2015)

Posted on July 2, 2015