During its 2017 session, the Virginia General Assembly enacted, and Governor Terry McAuliffe later signed, a series of provisions creating a Virginia Tax Amnesty Program (VTAP), the goal of which is to increase and accelerate the collection of unpaid Virginia taxes. VTAP offers amnesty for a broad range of unpaid tax liabilities, including most 2015 and earlier individual and corporate income taxes, if certain conditions are met. The program will run from September 13, 2017, through November 14, 2017.
VTAP provides for “the waiver of all penalties and one half of the accrued interest upon payment of the full amount of the tax and one half of the amount of interest due” for amnesty-eligible tax bills paid by November 14, 2017. Most unpaid individual and business income taxes from 2015 and earlier are eligible for amnesty under VTAP, as are taxes due from delinquent 2015 or earlier returns filed during the amnesty period. The penalty waiver includes both civil and criminal penalties, though taxpayers under criminal investigation or prosecution for filing a fraudulent return or with an active jeopardy or fraud assessment are not eligible for VTAP for any tax bill.
The program comes with a catch, however. To claim the benefit of the waiver, the taxpayer must pay the full amount of tax due and one half of the interest due for an amnesty-eligible tax bill by the end of the amnesty period. If the taxpayer pays less than the full bill, no waiver will be granted, and the taxpayer will owe the full amount of interest and penalties. Moreover, any amnesty-eligible taxes that remain unpaid after November 14, 2017, will be subject to an additional 20 percent post-amnesty penalty. The 20 percent penalty applies only to the unpaid tax liability, and not the outstanding penalties or interest.
Taxpayers who are unable to fully satisfy their tax bill during the amnesty period may avoid the 20 percent penalty by entering into a payment plan during the amnesty period. By entering into a payment plan, the taxpayer will not be subject to the 20 percent post-amnesty penalty so long as he or she remains current on the payment plan. If the taxpayer fails to make timely payments or otherwise does not comply with the terms of the plan, the penalty will be applied to the remaining balance. Taxpayers who enter payment plans during the amnesty period will not benefit from the penalty and interest waiver, however, unless the liability is fully paid by November 14, 2017.
Contact Our Professional Tax Attorneys Today
If you owe Virginia back taxes, contact the tax attorneys at Daniel Rosefelt & Associates, LLC, to learn more about the Virginia Tax Amnesty Program and discuss your legal options. We have a team of experienced tax attorneys, CPA’s, and IRS Enrolled Agents ready to help you find a solution to your tax debts. Our office serves Maryland, Virginia, Washington, D.C., and the rest of the nation. Call or contact our office online to request a confidential case consultation.