Louisiana Amends Tax Amnesty Program

Louisiana Gov. Bobby Jindal has signed legislation that amends the Tax Delinquency Amnesty Act of 2013, which requires the Louisiana Department of Revenue (LDR) to develop and implement a tax amnesty program for taxes administered by the LDR. Dates for the 2014 and 2015 Amnesty have not yet been announced. Louisiana had an amnesty program in 2013 from September 23, 2013 to November 22, 2013. The new legislation expands the scope of the amnesty program to include:

  • taxes for taxable periods that began before 2014 (previously, before 2013);
  • taxes for which the LDR and the taxpayer have entered into an agreement to toll the statute of limitations until the end of 2014 (previously, until the end of 2013);
  • for the 2014 amnesty program, taxes due prior to 2014 for which the LDR has issued a proposed assessment, notice of assessment, bill, notice, or demand for payment not later than May 31, 2014; and
  • for the 2015 amnesty program, taxes due prior to 2015 for which the LDR has issued a proposed assessment, notice of assessment, bill, notice, or demand for payment not later than May 31, 2015.

The new legislation permits 100% of penalties and 50% of interest to be waived during the 2014 amnesty period (previously, 15% of penalties and no interest). For the 2015 amnesty period, 33% of penalties and 17% of interest may be waived (previously, 10% of penalties and no interest). A taxpayer will be subject to double penalties if there is a final judgment rendered against the taxpayer by a court or if the taxpayer has exhausted all rights to protest taxes owed to the state 90 days prior to either the 2014 or the 2015 amnesty period, and the taxpayer then fails to submit an amnesty application before the end of the applicable amnesty period 90 days prior to which the final judgment was rendered or 90 days prior to which the taxpayer’s rights to protest taxes have been exhausted. A taxpayer who disputes a portion of the delinquent tax assessed by the LDR may now be eligible to apply for amnesty if the taxpayer remits a complete one-time payment of the portion of the tax that is not in dispute, plus applicable interest and penalties, to the LDR prior to the end of the applicable amnesty period. This payment is referred to as a “compromise amount.” The LDR will then have 30 days to determine if the taxpayer should be granted amnesty based on the compromise amount paid. If the LDR approves the compromise amount paid by the taxpayer, the taxpayer will be granted amnesty. If the LDR rejects the compromise amount, amnesty will not be granted and the taxpayer will be responsible for the full amount of the delinquent tax, penalties, interest, and fees prior to the application for amnesty. The legislation authorizes the use of six-month installment payment agreements. Taxpayers who apply for amnesty by opting to pay in installments remain eligible to participate in the amnesty program only by making complete and timely payment of the entire amount due under the installment agreement. Taxpayers involved in field audits or litigation are not eligible for installment agreements under the amnesty program. All installment agreements must require the taxpayer to provide a down payment of no less than 20% of the total amount of delinquent tax, penalty, interest, and fees owed. Taxpayers who cannot enter into an agreement to make automated electronic payments are not eligible for an installment agreement. Additionally, under the new legislation, the LDR is prohibited from accepting tax credits as payment of any tax, interest, penalty, or fee paid as a result of participation in the amnesty program. The legislation also states that, after 2015, no new LDR amnesty programs are allowed before January 1, 2025. (Act 822 (H.B. 663) Laws 2014, effective August 1, 2014)

UPDATE: Louisiana has announced the dates for the 2014 tax amnesty program. The 2014 program will run from October 15, 2014 to November 14, 2014. For our previous news item on this topic, click here.

Posted on July 21, 2014