United States

Texas tax amnesty program begins on May 1, 2018

INSIGHT ARTICLE  | 

The Texas state tax amnesty program will run from May 1, 2018 through June 29, 2018 and provide eligible applicants with a complete waiver of interest and penalties. All state and local taxes and fees administered by the Texas Comptroller are eligible, with the exception of Public Utility Commission gross receipts assessments. Other ineligible taxes include the sports and community venue tax, property taxes, IFTA taxes, or unclaimed property liabilities.

Eligible taxpayers include those who:

  1. did not file a required return or report originally due before Jan. 1, 2018; or
  2. underreported taxes or fees due for any reason, such as erroneously claiming credits or deductions.

However, the amnesty does not apply to filing periods under audit or identified for an audit. Taxpayers that have signed a settlement agreement or voluntary disclosure agreement before the beginning of the amnesty period are ineligible to participate.

Importantly, all amnesty reports must be submitted through a paper return and payments made with a check for the taxpayer to receive the waiver of penalty and interest. Installment plans are unavailable for amnesty payments. Those taxpayers normally required to file and pay electronically are not penalized for filing for amnesty through the non-electronic medium.

This is the first Texas tax amnesty program in almost six years. Additional information can be found on the Texas Tax Amnesty Program website.

Takeaways

Tax amnesty and voluntary disclosure programs can be extremely beneficial to taxpayers with outstanding liabilities. However, due to differences between the two programs, such as look-back periods, taxpayers may find one program more beneficial than the other. Taxpayers considering applying for amnesty should discuss the benefits and risks of the program with their state tax adviser.

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