The New Jersey Tax Amnesty Program applies to state tax liabilities for tax returns due on or after February 1, 2009 and prior to September 1, 2017. The program provides incentives for taxpayers who come forward and pay delinquent state tax liabilities during the amnesty period. Taxpayers who take advantage of the program are relieved from half of the otherwise applicable interest and any late payment penalty, late filing penalty, cost of collection, delinquency penalty, or recovery fee is abated. This can result in significant savings.
A taxpayer who has not filed a tax return to report the tax for which he or she is seeking amnesty must file the return by the end of the amnesty period (ie, January 15, 2019). In addition, a taxpayer’s participation in the program represents a waiver of all administrative and judicial rights of appeal concerning the payment, and no payment made under the program is eligible for refund. Taxpayers are still required to pay any civil fraud or criminal penalty arising from an obligation imposed under any state tax law. Taxpayers under criminal investigation or charge for any state tax matter at the time of payment are not eligible for the program.
It is in an eligible taxpayer’s best interest to take advantage of the program. Taxpayers who are eligible but do not take advantage of the program may be charged a post-amnesty penalty of an additional 5% of any eligible amount not paid during the amnesty period. The New Jersey Division of Taxation is not permitted to waive or abate this penalty.
In our experience, the Division of Taxation is invested in meeting revenue goals by the end of the amnesty period, and is more amenable during this period to resolving all types of tax disputes more favorably to taxpayers.