Trick or Treat! Louisiana’s 2015 Tax Amnesty program begins at 12:00 AM on November 16, 2015 and closes on December 15, 2015. The 2015 iteration of the amnesty program offers a 33% waiver of penalties and 17% waiver of interest for taxpayers that apply and pay 100% of delinquent taxes.
Here’s a scary thought: This is the last amnesty program until at least 2025 (at least unless the Legislature subsequently changes its mind).
The following taxes are eligible for amnesty:
- Taxes for taxable periods that began before January 1, 2014 (this qualification was not updated in Act 822 (2014 Reg. Sess.) to January 1, 2015 for the 2015 program); or
- Taxes due prior to January 1, 2015 for which the Department has issued an individual or a business proposed assessment, notice of assessment, bill, notice, or demand no later than May 31, 2015.
- Taxes for which the taxpayer and the Department have entered into an agreement to interrupt the running of prescription and said agreement suspends the running of prescription until December 31, 2014 (this qualification was not updated in Act 822 to December 31, 2015 for the 2015 program).
Interestingly, when the amnesty bill was updated in 2014, the Legislature did not bring forward certain dates in the eligibility sections, thereby creating what appears to be an eligibility gap for more recent assessments. Specifically, for example, a taxpayer interested in amnesty would technically fall outside the eligibility dates for applicable sales/use tax periods that were in 2014 or earlier, but where an assessment, notice of assessment, or other demand for payment was sent by the Department on or after June 1, 2015. Thus, as pertains to taxpayer fairness, it seems a one-day difference in the issuance of a notice from the Department could be the difference between being eligible for amnesty and being ineligible for amnesty.
Also, importantly, as we noted in a prior post, taxpayers should keep in mind the following when considering tax amnesty:
- Applying for amnesty means the taxpayer agrees to the Department’s position for three years;
- The taxpayer is still susceptible to audit; and
- The taxpayer waives the right to any refunds for periods for which the taxpayer claims amnesty.
Amnesty can also be an effective means of facilitating the settlement of disputed tax matters when matters are settled and paid through amnesty.
Additionally, as with the 2014 tax amnesty program, taxpayers may propose a “compromise” to settle a portion of a delinquent tax dispute. Under this option, the taxpayer will remit a “compromise amount” of taxes not in dispute, along with applicable interest and penalties. The Department has 30 days after the amnesty program ends to accept or decline the compromise amount. Taxpayers, however, should be aware that if the Department rejects the compromise amount, the taxpayer is liable for the full amount of the delinquent tax, penalties, interest and fees, with the compromise amount allocated towards the taxpayer’s debt.
As was the case in 2014, qualifying individual and business taxpayers may also pay their overdue tax liabilities through installment payments over a six-month period of time. For those taxpayers interested in making installment payments, the Department has also issued an emergency rule, LAC 61:I.4915, which provides further clarification regarding this installment payment option.
Additional information regarding Louisiana’s 2015 Tax Amnesty program can be found at the Department’s tax amnesty website at www.ldrtaxamnesty.com.
A copy of the applicable tax amnesty Act can be found here.
Proceed with caution, but don’t let amnesty scare you.
LAGNIAPPE FROM THE CHEF’S CORNER:
With Thanksgiving around the corner, stay tuned for our one of a kind “Pumpkin Fried Chicken” recipe!