Taxation Legal News

Virginia Tax Amnesty Closes With a Flurry

Virginia's 63-day tax amnesty program concluded Monday, but not before a deluge of delinquent taxpayers descended on tax department service centers, lit up toll-free hotlines and inundated the amnesty web site.  The total number of taxpayers who made it in under the wire will not be known for some time. 

In all, the department received more than 315,000  Amnesty contacts from individuals and businesses , with as many as 45,000 reaching out on the final day.  In addition, the Virginia Department of Taxation placed more than 377,000 outbound calls to eligible taxpayers during the amnesty program.

Demand for walk-in service on the final day was so heavy and parking made so scarce at the department's Richmond headquarters that a makeshift drive-through service was set up in the parking lot.  Over 1,000 drive-through payments were dropped off by nightfall.  One person drove up with income tax returns for 13 consecutive years.  Other taxpayers chose to stand in long lines waiting for their tax returns to be prepared before the deadline.  About 500 walk-ins in Richmond, 300 in Norfolk, and 120 in Hampton were served on the final day.  Satellite offices in Arlington and Fairfax stayed open until 6:00 p.m., well after the advertised time.

At midnight 20 callers were still trying to reach the department on the Amnesty hotline and 4 taxpayers were still making payments on the Amnesty web site.  The hotline stayed open until 12:20 am.  The last payment was taken on the web site at 2:30 a.m.

"Amnesty is over, and it is time to compile and analyze the results," said Kenneth W. Thorson, Virginia's tax commissioner.  "We expect amnesty tallies to be completed by early December."

According to Thorson, the tax department's focus now turns from amnesty to a stepped-up enforcement program.  As of today, taxpayers who failed to take advantage of amnesty will automatically receive a 20 percent penalty added on to their existing tax bills.  The department, which has hired more than 100 new collection agents, auditors and customer service representatives, also will be wielding other enforcement tools provided under current law, including garnishing wages, seizing assets and IRS refunds and filing criminal warrants.

Virginia's tax amnesty program waived all penalties and half the interest on most state taxes, providing the outstanding bills were paid during the nine-week amnesty period.  The goal for amnesty was $48 million.

In the aftermath of the extraordinary surge of activity brought on by the end of the amnesty program, Commissioner Thorson had high praise for department employees.

"I am especially proud of this department," Thorson said.  "They did an exceptional job in planning and preparation for amnesty, including the development of innovative, breakthrough technology.  And, employees worked tirelessly in the execution of the amnesty program.  There is, of course, much more to do, and I am confident that we will bring tax amnesty to a successful conclusion."

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	Did You Know?
	There are tax rules if change in accounting method is made Generally, the partnership must get IRS consent to change its method of accounting used to report income (for income as a whole or for any material item). To do so, it must file Form 3115, Application for Change in Accounting Method. See Form 3115 and Pub. 538, Accounting Periods and Methods.