Tax Amnesty

The New Jersey Division of Taxation recently announced the Fall 2014 Tax Recovery Program for individuals and businesses with tax liabilities from 2005 through 2013. This program affords taxpayers an opportunity to significantly reduce penalties and recovery fees by entering into a closing agreement with the Division of Taxation to satisfy certain tax obligations.

To begin the process, taxpayers must provide personal identifying information prior to entering into negotiations and all closing agreements must be executed and paid in full by November 17, 2014. Failure to pay in full by November 17, 2014 will subject the taxpayer to the full penalties, costs of collection, and recovery fees associated with identified tax liabilities.

Under the Tax Recovery Program, all taxpayers with deficiencies from the qualifying taxable periods may apply directly, or though their advisers, to the Division of Taxation beginning on October 1, 2014.

The Division is also offering relief to individuals and businesses with tax delinquencies through the Voluntary Disclosure Program. For purposes of this program, a delinquency is defined as the failure to file a tax return. Under the Voluntary Disclosure Program, taxpayers may enter into closing agreement negotiations anonymously and will not be subject to the November 17, 2014 deadline. To be eligible as an individual taxpayer, a taxpayer must not have had previous contact with the Division, nor be under criminal investigation and the taxpayer must pay outstanding tax liabilities. To be eligible as a business taxpayer, the business must not have had previous contact with the Division, nor have registered as a taxpayer in New Jersey or be under criminal investigation, and the taxpayer must pay outstanding tax liabilities.

Under both the Tax Recovery Program and the Voluntary Disclosure Program, the taxes subject to amnesty include sales and use taxes, withholding income taxes, pass-through entity withholding taxes, room occupancy excise taxes, deeds excise taxes, cigarette excise taxes, gasoline excise taxes, and boat and recreational vehicles sales taxes, among others.

For more details about the Voluntary Disclosure Program, or if you have any questions about the these programs, please contact a member of the Cooper Levenson Business, Tax, Estate Practice Group at (609) 344 – 3161.