The State of Ohio is providing an amnesty program under which taxpayers may voluntarily step forward and resolve their tax deficiencies. The Ohio tax amnesty program begins on January 1, 2018, and remains open until February 15, 2018. This constitutes a short window of opportunity for the taxpayer but still may result in tremendous savings. Amnesty is available for both personal and business tax deficiencies, offering full penalty abatement plus a fifty-percent reduction in interest. Therefore, it is an opportunity for taxpayers to clean up their Ohio taxes with significant savings.
Ohio is willing to waive all penalties and one-half of the interest associated with tax liabilities reported under the amnesty program, contingent upon the taxpayers paying the outstanding balances due. Despite the cash outlay, deficient taxpayers will find the full waiver of penalty and reduced interest quite attractive as these can otherwise be substantial amounts on top of the tax bill. This is especially true as tax liabilities age because as the debt gets older, the amount of penalty and interest compounds.
While the amnesty program is fairly broad in scope, there are some restrictions on participation. First, the State must not have already initiated collections or enforcement efforts against the taxpayer. Second, the unpaid tax must have been due as of May 1, 2017. Therefore, it would include all Ohio tax liabilities prior to 2017. If a taxpayer has been nervous about previous returns, filed or unfiled, and has not been contacted by the Ohio Department of Taxation, then the 2018 amnesty program offers a relatively easy path forward and should be considered.
The amnesty program applies to most Ohio tax types. State income taxes, school district income taxes, employer withholding, pass-through entity taxes, sales and use taxes, commercial activity tax, alcohol and tobacco taxes, and financial institution taxes are all eligible for the amnesty program. Property and utility taxes are not eligible. Note that cities are not participating in the amnesty program and therefore taxes owed to municipalities are not eligible for the program.
Taxpayers that can benefit from the amnesty program are encouraged to call one of our tax attorneys for help. Given that the amnesty window is only open for six weeks, the time to begin preparation for participation is now. We are happy to provide a confidential consultation and assist with resolving your tax problems. Navigating tax deficiencies can be very complicated and stressful but you do not have to go it alone.