- The Washington Times - Saturday, August 2, 2003

RICHMOND — Virginia has a message for delinquent taxpayers: you can pay us this fall, or you can pay us lot more later.

A statewide tax amnesty program that officials estimate will bring in $48 million for the state’s cash-strapped treasury begins a 63-day run on Sept. 2 and ends on Nov. 3, the day before the legislative elections.

Residents paying off a delinquent tax bill during the amnesty period will owe only half of the accrued interest, and steep penalties that would ordinarily be assessed will be waived. Those who miss the amnesty deadline will be subject to an all-out tracking effort by a beefed-up Department of Taxation, which will use computer wizardry not available the last time the state offered tax amnesty 13 years ago.

Tax Commissioner Kenneth W. Thorson said the autumnal grace period is a chance for people who have gotten behind on their taxes to buy peace of mind at a discount.

“What we try to recognize with the amnesty program is that of the people who don’t pay taxes, there are folks who are under such economic stress that they can’t pay. If it comes to putting food on the table or providing shelter, those will come first before taxes, and we understand that,” Mr. Thorson said.

“They still have to pay the tax and half of the interest on it, but we’ll waive the penalty and give them the opportunity to come clean,” he said.

Amnesty is only for people who have simply failed to file returns or who have filed returns but been unable to pay. It doesn’t extend to people who have committed fraud to dodge their tax burdens.

Subtracting costs of staff and material for the amnesty program, the state hopes to net about $41 million — a one-time enhancement for its thin 2004 state budget.

Mr. Thorson said the collections estimate is drawn from the participation rates for amnesty programs other states have conducted recently.

The amount the state hopes to recover is only a fraction of the $150 million to $180 million in what Mr. Thorson estimates are collectible outstanding taxes. The total of unpaid taxes on the state’s books, Mr. Thorson said, probably approaches $1 billion, “but that goes back forever.”

Delinquent taxpayers will receive letters from the state just before the start of the amnesty period. The letters will list the unpaid balance and the total due if the bill is paid before the amnesty expires. The letters also will show the much higher sum owed after the deadline, Mr. Thorson said.

To aid in the amnesty effort and the enforcement that will follow, the General Assembly this year authorized the Taxation Department to hire 117 additional persons — auditors, field collectors, customer service positions and other staff, Mr. Thorson said.

The department also will have new computerized tools to help it identify sources of wealth and bank accounts that people once could hide more easily from the tax man.

Virginia also stands to collect back taxes as a result of a new federal law that allows the Internal Revenue Service to deduct unpaid state taxes from federal income tax refunds and return that money to the states to which the delinquent taxes are owed.

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