The New Jersey Tax Amnesty Program slogan says: “Consider it a gift. No penalties, reduced interest on back taxes.” It’s a chance for people that owe a tax return or tax money to come forward and pay in full.
“Everyone is eligible except bills that are under criminal investigation,” said Frank Liberi, supervising investigator for the Division of Taxation at the state Treasury Department.
Liberi says the outreach campaign sent out letters to over 750,000 people in the state. They’ve also been getting many calls and emails.
“In total, we’ve received over 40,000 telephone calls. To date, we have over 4,000 emails. We expect, and this is only halfway through, we expect a lot to be coming in over the next three, four weeks,” said Marita Sciarrotta, deputy director of the Division of Taxation.
This amnesty picks up where the last one ended. That means it applies to money owed on tax returns due on or after Feb. 1, 2009 and before Sept. 1, 2017.
“This is money that is due to the state, and this is just a way to entice them to pay,” said Assemblyman Rob Karabinchak.
Signs on billboards and at train stations are part of an advertising campaign.
“There was a line item placed in the budget of approximately $25 million. Some of that money is going to the advertising campaign. Some of it will cover the overtime necessary to process the returns and the payments,” said Sciarrotta.
But Sciarrotta says they anticipate collecting about $200 million, which amounts to extra money in the budget for programs that are in need. Even though that’s about a quarter of what the state estimates it’s owed in back taxes eligible for amnesty, according to Sciarrotta, “We will more than recoup any expense outlaid for this program.”
While the initial projections were unavailable, the Treasury Department says the amnesty program in 2009 collected $734 million, and the one before that in 2002 brought in $456 million.
“It gives you a chance to get the debt off your books. It gives you a chance to get your returns filed and come into compliance, so that’s the taxpayer end,” said Liberi.
Tax Foundation spokesperson John Buhl worries if the states continues to offer tax amnesty, taxpayers may take advantage of the rules because they know they’ll get a chance to fix it down the line.
“If you’re using this to fill in a priority that’s recurring, whether it’s education or transportation, then you’re going to be left in the exact same situation in about a year or two, so it’s just a very temporary fix to try to, I guess you could say, kick the can down the road, so to speak,” Buhl said.
Mark your calendars, if you don’t pay up before Jan. 15 the state will tack on a 5 percent penalty, and that’s in addition to any other penalties and interest that have already piled up.