PBMares Accounting Blog

Now Is the Time to Pay Back Taxes to Virginia!

Posted by Lori Roberts, CPA on Sep 6, 2017 4:47:13 PM

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Virginia Announces Amnesty Period to Start September 13.

Virginia taxpayers have an opportunity to “come clean with the tax man” as the Virginia Department of Taxation has just announced the dates for the amnesty period under provisions enacted during the 2017 Legislative Session.   The provisions, collectively referred to as the Amnesty Laws, authorize the Department of Taxation to administer the program to increase and accelerate the collection of delinquent taxes.  The Amnesty period will run from September 13, 2017 through November 14, 2017.   Generally, the provisions provide for a waiver of all penalties and one-half of the interest owed on all eligible delinquent tax bills paid.       It is important to note that under the amnesty laws, any delinquent tax bill not paid during this period will incur an additional penalty of 20% of the tax owed, in addition to the penalties and interest already applied under normal circumstances.    All applicable required returns must be filed with all required attachments prior to or at the time of payment.  For returns filed during the amnesty period, payment must accompany the return.   Interest will be computed using a 5% rate which is the average rate charged over the preceding 5 years.

Amnesty will extend to tax debts already covered by a payment plan; however, the entire debt must be paid during the amnesty period to receive the amnesty benefits.    Note that unpaid amounts already under a payment plan will not be subject to the additional 20% penalty so long as the taxpayer remains current on their payment plan.

Taxpayers who have an appeal or contested assessment pending during Amnesty may take advantage of the amnesty benefits if they pay the full amount of the tax and one half of the interest on the assessment.  This action will be deemed to withdraw the current action and waive the right to an additional administrative or judicial appeal.

Virginia Department of Tax will notify taxpayers by mail if there is a known delinquency outstanding that will qualify for amnesty.  Amnesty provides a window of opportunity is available for those taxpayers who have not filed returns to bring filings up to date and pay outstanding tax debts with minimum interest and no penalty.    The downside is if action isn’t taken during amnesty period, the cost of non-compliance will be even greater after the amnesty period.  

The Virginia Department of Taxation has published “Guidelines for the Virginia Tax Amnesty Program” which can be found at:  https://www.tax.virginia.gov/sites/default/files/inline-files/final-amnesty-guidelines-2017.pdf   

Topics: Tax Planning, SALT

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Lorilei J. Roberts, CPA, MSBA, CGMA

Lorilei J.  Roberts is the Team Leader of the State and Local Tax group for PBMares, LLP, in Fairfax Virginia, providing consulting and compliance services to businesses and individuals throughout Virginia, Maryland, the District of Columbia, as well as international clients. 

She can be reached at ljroberts@pbmares.com or (703) 385-8577.

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