This fall, six states (Arizona, Florida, Kansas, Maine, Missouri, and Virginia) plus New York City are holding tax amnesties. The types of taxes, penalties, and interest that are forgiven vary, as do the starting and ending dates. The Federation of Tax Administrators' web site, www.taxadmin.org, lists all current and upcoming amnesties, including links to the individual state web sites.
Amnesties present an opportunity for companies to come clean with their income or other tax liabilities. Once the amnesty expires, audit rates and penalties for underpayment or failure to file often increase steeply. Expect more states to adopt amnesties when their legislatures meet next year. Amnesties provide a quick revenue gain, even if they allow delinquent taxpayers to escape penalties and thereby reduce future receipts.