Amnesty offers for tax cheats

[Mr. Mephistopheles]

For tax cheats, meltdown prompts amnesty offers
By GLEN JOHNSON, Associated Press Writer Glen Johnson, Associated Press Writer

BOSTON – Turns out it's a pretty good time to be a tax cheat.

Desperate to bring in revenue in the middle of a recession, states across the country are adopting tax amnesty programs, offering to let people pay their past-due tax bills with little or no penalties or interest.

"Something is better than nothing," said Dino DiCianno, executive director of the Nevada Taxation Department. DiCianno said Nevada gave up more than $14 million in penalties and interest to collect nearly $41 million between July and October.

Oklahoma, like Nevada, generated about twice as much as it expected from its offer of amnesty, raising $82 million through its 90-day Clean Slate program for businesses and individuals. New York has a program under way, and Connecticut and Massachusetts are drawing up theirs. California debated one before rejecting it in favor of stiffer penalties. Delaware's incoming governor campaigned on the idea. A similar program is being considered for Louisiana when its lawmakers return in April.

State after state is facing a disastrous drop-off in tax revenue because of the stock market collapse and the recession. Many states have already cut their budgets and started laying off employees.

"Anything you can do to speed up cash flow is cheaper than your alternatives, like borrowing," said Verenda Smith, spokeswoman for the Federation of Tax Administrators.

Many states are reluctant to offer amnesty, arguing that its rewards cheaters, discourages honest taxpayers and poaches revenue the states will collect in the future — especially as they improve the databases they use to catch delinquents. They worry, too, that people will hold back on their taxes and simply wait for the next amnesty.

"If the attitude is we're going to hand out get-out-of-jail-free cards, people's attitudes can change," said Paul Warren of the California Legislative Analyst's Office. "You can have a breakdown in compliance."

An Oklahoma City lawyer challenged his state's amnesty program all the way to the state Supreme Court, arguing that the Oklahoma Constitution prohibits forgiving a state debt. The court rejected his claim in a one-sentence ruling.

"It is a slap in the face to all law-abiding Oklahomans who pay their taxes as required by law," said lawyer Jerry F. Fent.

New York, which has a $1.5 billion deficit, began a limited amnesty last January that covers income, corporate and sales taxes. The state has collected $11 million so far and hopes to take in $30 million.

Connecticut Gov. Jodi Rell has warned that the state faces nearly $6 billion in deficits over the next two fiscal years. The state is hoping to generate $40 million by instituting a 56-day tax amnesty program next spring. It will let taxpayers pay their late state taxes without penalty, and with a 25 percent reduction in interest.

"States are trying to reach for every tool in the toolbox right now," said Connecticut Senate President Pro Tem Don Williams.

[Arthur Rubin]

California's last amnesty offer was combined with a 50% penalty for any future underreporting, even if there was substantial authority for the questioned tax return. I wouldn't be surprised if many of the "tax amnesty" offers have similar clauses.

[All_Empires_Fall]

Many states are reluctant to offer amnesty, arguing that its rewards cheaters, discourages honest taxpayers and poaches revenue the states will collect in the future — especially as they improve the databases they use to catch delinquents. They worry, too, that people will hold back on their taxes and simply wait for the next amnesty.

"If the attitude is we're going to hand out get-out-of-jail-free cards, people's attitudes can change," said Paul Warren of the California Legislative Analyst's Office. "You can have a breakdown in compliance."

An Oklahoma City lawyer challenged his state's amnesty program all the way to the state Supreme Court, arguing that the Oklahoma Constitution prohibits forgiving a state debt. The court rejected his claim in a one-sentence ruling.

"It is a slap in the face to all law-abiding Oklahomans who pay their taxes as required by law," said lawyer Jerry F. Fent.

This is going off on a bit of a tangent, but here is the perfect example of another group that is sending this once great country down the tubes: overzealous prosecutors.

I see articles and read cases every single day where it is clear that the defendant is not even deserving of spending a single night in jail but we have overzealous prosecutors ( who care nothing for justice, and only for their number of convictions ) trying to lock them away for years.

The biggest problem isn't that a few innocent people get put behind bars for absurd reaons, although that in itself is a travesty, but that sometimes these cases have a larger impact on society and become mandates (I think thats what its called) for more stupid laws to be passed.

The war on drugs, the new cyber-bullying laws, putting tax protestors behind bars, child protection laws, and the list goes on and on and on and on and on....

Like seriously, I just read an article today where four year old woke in the middle of the night, walked out his front door, crossed a street, and walked into a toy store, and he is taken away into the custody of child protection services?

Accidents, and problems, F'n happen. Someone doesnt always have to be at blame!

So now tax amnesty is all of a sudden setting a bad example? The entire American economical system is built on the idea of debt, which is exactly what tax becomes when its not immediately paid, and yet its okay for people too carry as much debt as they possibly can (in fact that is even appreciated by lenders) but its illegal and people are called a tax cheat when they owe the government instead of a lender?

Its also funny that those who amount masses of tax debt didn't borrow a single dime of that debt from anyone, but simply accrued it by themselves being successful. I dont know, it sounds a bit hypocritical too me.

I know thats a bit of a tangent, but hey, I needed something to complain about today.

[Doktor Avalanche]

This is going off on a bit of a tangent, but here is the perfect example of another group that is sending this once great country down the tubes: overzealous prosecutors.

I see articles and read cases every single day where it is clear that the defendant is not even deserving of spending a single night in jail but we have overzealous prosecutors ( who care nothing for justice, and only for their number of convictions ) trying to lock them away for years.

I wonder what happens when it's you who benefits from "overzealous prosecutors".