Alabama Enacts Tax Delinquency Amnesty Act

October 23, 2015

By David Venanzi

On September 21, 2015, Alabama enacted the Alabama Tax Delinquency Amnesty Act of 2016.  This act requires the Department of Revenue to hold a tax amnesty program in 2016 for at least a 2-month period prior to August 31, 2016. Barring certain exceptions, the tax amnesty will apply to all taxes administered by the Department and will waive one-half of the interest and all of the penalties for approved applicants.

The following taxes will be eligible for tax amnesty:

  1. Taxes due prior to January 1, 2015; and
  2. Taxes for periods that began before January 1, 2015

Ineligible items include:

  1. Motor fuel taxes
  2. Penalties imposed by Ala. Code § 40-29-73 (failure to collect and pay over tax); and
  3. Penalties for failure to submit information reports that are not based on an underpayment of tax

Amnesty will only be granted for eligible taxes to eligible taxpayers who apply for amnesty during the amnesty period on the forms that will be prescribed by the Commissioner and that pay all taxes, fees, costs, and any interest due upon filing the amnesty application.  A standard look-back period will apply for all eligible tax types meaning the last 3 full tax years of tax returns which are delinquent.  If the taxpayer collected taxes without remitting, the look-back period will be extended to include all periods back to the point of collection.  No installment agreements will be entered into for the tax periods that are approved for amnesty.

Amnesty will not be granted to taxpayers who have been contacted by the Department who are parties to any criminal investigation or criminal litigation in any court in the United States or Alabama on the effective date of the Act for nonpayment, delinquency, or fraud in relations to any tax administered by Alabaman law and the Department.  Should a deficiency assessment be issued for a period for which amnesty was taken, the Commissioner has the authority to impose penalties and institute civil proceedings or criminal proceedings as authorized by law.  For more information, click here.

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