- Associated Press - Friday, November 6, 2015

INDIANAPOLIS (AP) - The Indiana Department of Revenue has stopped a state contractor from sending out a letter about the state’s tax amnesty program that spurred complaints.

The letter, which was looking to get people to participate in the program, told about 150,000 taxpayers they owed back taxes despite not being verified as being behind.

The state agency’s move to halt the letter was first reported by WTHR-TV. The letter told the taxpayers that after “a review of past tax filings, we believe you may be under reporting taxable income for the state of Indiana.”

The amnesty period gives taxpayers a chance to pay off tax debt dating from before 2013 without the penalties, interest and collection fees that have accumulated on that debt. Individuals and businesses have until Nov. 16 to settle their tax debt through several methods, including cash payments, legal settlements and payment plans.

Department of Revenue spokeswoman Amanda Stanley told the Journal Gazette that the contractor didn’t follow established protocol when sending the letter. Taxpayer selection criteria weren’t submitted to the department, and the department didn’t approve the mailing list.

“As an unintended consequence, some taxpayers received this letter in error,” Stanley said.

The contractor will send a second letter, Stanley said, “to clarify and apologize for the misperception caused by the first letter.”

The amount paid to the contractor depends on how much the amnesty program brings in, though a contract caps that amount at $15 million. The contracted goal is to collect $110 million.

Stanley said an agency goal to bring in $27.5 million in cash payments was achieved Oct. 29. Roughly $55 million in cash payments had been collected as of Wednesday.

The amnesty program has garnered participation from 33,700 taxpayers so far, and more than 5,100 have established payment plans.


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