Gov. Mike Pence has announced the Indiana Department of Revenue will conduct a two-month tax amnesty period this fall.
Pence said last week the first $84 million of the outstanding taxes collected from Sept. 15 through Nov. 16 will fund the Indiana Regional Cities Development Fund.
Tax amnesty is a limited-time opportunity for both individuals and businesses to pay past-due base tax liabilities free of penalty, interest and collection fees. Existing tax liabilities for all tax types managed by the department for periods ending before Jan. 1, 2013, are eligible to participate.
Indiana’s first tax amnesty program was conducted in 2005, during which the state collected $244 million in taxes. Taxpayers who participated then are not eligible to participate in the new amnesty period.
There is no guarantee that the governor’s offer will yield anything like the money he apparently envisions or that it will reach the level of the earlier amnesty proposal. On the other hand, most of the tax deadbeats being targeted are not going to willingly pay up not only the taxes they owe but also the penalties that have been assessed.
This way, whatever is collected is almost like found money.
The amnesty program is not tax forgiveness. People and businesses will stay have to pay what they owe. Rather, the offer simply represents the erasure of the penalties.
Critics of tax amnesty argue that future scofflaws will now simply wait until the next amnesty proposal to pay up, meanwhile using the money they would have paid in taxes for other purposes.
But the Pence offer does not represent a given time period or cycle. The timing is unpredictable, and there is no guarantee that he or future governors will repeat the offer.
We hope the governor’s program brings in a sizable amount. It represents money that already should belong to the state and by extension the rest of Indiana’s taxpayers.
By forgiving the penalties, the state stands to collect millions of dollars that otherwise might never be collected.
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Details of Gov. Mike Pence’s tax amnesty offer can be found at taxamnesty.in.gov.
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The governor has proposed a short-term tax amnesty program.
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By forgiving the penalties, the state stands to collect millions of dollars that otherwise might never be collected.
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