United States

Missouri enacts tax amnesty legislation

Amnesty period opens Sept. 1, 2015

TAX ALERT  | 

On April 27, 2015, Missouri enacted legislation authorizing the establishment of a tax amnesty program applicable to all tax liabilities due and unpaid on or before Dec. 31, 2014. The program will open on Sept. 1, 2015, and run through Nov. 30, 2015. Participants that pay the entire amount of tax due during the amnesty period will be granted waiver of penalties, interest and additions to tax.

Program parameters

The amnesty program will apply to all taxes administered by the Missouri Department of Revenue (DOR) that were due and unpaid on or before Dec. 31, 2014, and will extend to liabilities that were assessed prior to the commencement of the amnesty period on Sept. 1, 2015. However, the amnesty will not extend to any taxpayer who at the time of payment is a party to any criminal investigation or to any civil or criminal litigation that is pending in any court of the United States or Missouri for nonpayment, delinquency or fraud in relation to any state tax imposed by Missouri. This limitation is imposed on the taxpayer and applies to all taxes and not just the tax that is subject to criminal investigation or civil or criminal litigation at the time payment is made.

To participate in the amnesty program, a qualified taxpayer must submit a written amnesty application on forms provided by the DOR, file a tax return for each taxable period for which amnesty is requested, and pay the full amount of tax due during the amnesty period. Further, as part of the amnesty agreement, the taxpayer must agree to comply with all state tax laws for the next eight years from the date of the agreement. Violators of this provision of the agreement will be required to remit all penalty, interest or additions to tax waived pursuant to the amnesty program. Lastly, participation in the amnesty program will constitute an express and absolute relinquishment of all administrative and judicial rights of appeal and all rights to refund or credit of any amount paid during the amnesty period.

The amnesty program will not apply to any payments made before Sept. 1, 2015, or after Nov. 30, 2015, and no waiver of penalty, interest or additions to tax will be granted in respect to such payments. 

Takeaways

This amnesty program is broadly applicable and provides a substantial benefit for taxpayers with Missouri tax liabilities that were due and unpaid on or before Dec. 31, 2014. However, before proceeding with filing an application to participate in the program, taxpayers should consider that the program does not provide a limited lookback period. Accordingly, taxpayers that have not historically filed returns or have an applicable statute of limitations that extends back more than four years should weigh the benefits of participation in the amnesty program against entering into a voluntary disclosure agreement with the state, which would still provide a waiver of penalties but would cap the lookback period at four years.

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