Tax-amnesty window closes soon Tax-amnesty window closes soon (March 23, 2005)

It's tax time again, but this year may hold particular significance for some taxpayers. With the state facing a multi-billion-dollar deficit, finding and prosecuting delinquent taxpayers can acquire a special vigor.

On February 1, the state tax board initiated a tax amnesty program that allows any taxpayer -- business or individual -- to escape possible prosecution by paying unpaid income, franchise, sales or use taxes, plus interest, from 2002 or earlier, according to Assemblyman Ira Ruskin, D-Redwood City.

The program expires Thursday, March 31, after which delinquent taxpayers will face "substantial new penalties," says the state tax board. The payment deadline is May 31, but an installment plan can extend that deadline to June 30, 2006.

Eligible participants include those who did not file required past state returns, who under-reported income on a return, who claimed an excessive deduction, or who did not pay assessed taxes, interest, penalties or fees.

Taxpayers under criminal investigation or prosecution for tax-related matters are not eligible for amnesty, nor are taxpayers who used certain "abusive" tax shelters.

Use taxes are identical to sales taxes except that they apply to purchases made out of state -- including over the Internet -- and used within the state. California lacks an enforcement staff and so relies on honesty and "good citizenship," state tax-board spokesman Vic Anderson has said. Every month, the state receives about 23 use-tax payments averaging about $5,700 each, he said.

The state's tax-collection agencies estimate revenues of $670 million from the amnesty program for fiscal years 2004-05 and 2005-06. The previous amnesty -- in 1984-85 -- raised $154 million.
INFORMATION

For more information, go to www.ftb.ca.gov, and click on the tax amnesty button.

E-mail a friend a link to this story.