Alabama enacts tax amnesty program

The Alabama Tax Delinquency Amnesty Act of 2018 has been enacted. The amnesty program will be held for the period beginning July 1, 2018, and ending on September 30, 2018. The program applies to all taxes administered by the Department of Revenue except for motor fuel, motor vehicle, and property taxes. The taxes eligible for amnesty include:

  • Taxes due prior to January 1, 2017, and
  • Taxes for taxable periods that began before January 1, 2017.
  • Participation in the program is conditioned upon agreement by the taxpayer to waive any right to protest or initiate an administrative or judicial proceeding. The agreement only applies to the specific tax and the tax period for which amnesty is granted. Amnesty applications must be submitted in an electronic manner as prescribed by the department.

Waiver of interest and penalties:

The program waives all of the interest and penalties associated with the tax periods for which amnesty is granted. However, penalties may be imposed for various reasons, including failing to comply with the amnesty provisions, providing false or fraudulent information, and/or cost of collection penalties.

Look-back periods:

A limited look-back period of the last three full tax years, or 36 months, applies separately to each tax type. If the taxpayer has collected any tax without remitting the tax to the department, the look-back period will be extended to include all periods, back to the point of collection.

Amnesty requirements:

An eligible taxpayer who is granted amnesty must comply with the following requirements:

  • Submit to the department by November 15, 2018, all applicable returns, supporting documentation, and the full payment of the tax. No payment plans will be entered into for taxes that are approved for amnesty. An amnesty payment or return submitted in a properly addressed envelope with sufficient postage delivered by the U.S. Postal Service is deemed paid or received on the date it is postmarked. An amnesty payment or return delivered by courier or taxpayer is deemed paid or received on the date it is delivered to the department’s headquarters or a regional office; and
  • Include the current year return with the amnesty returns filed for the eligible tax type. Penalties for failure to timely file a return and failure to timely pay will be waived. Waiver of interest does not apply to current year returns.

Ineligible taxpayers:

Tax amnesty may not be granted to a taxpayer under any of the following circumstances:

  • The taxpayer is a party to a criminal investigation or criminal litigation pending as of March 6, 2018 for nonpayment, delinquency, or fraud in relation to any state tax imposed by Alabama and administered by the department;
  • The taxpayer has delivered or disclosed a false or fraudulent application, document, return, or other statement to the department in connection with an amnesty application;
  • The taxpayer has been issued a final assessment in which the appeal period has ended;
  • The taxpayer has entered into a voluntary disclosure agreement with the department before December 31, 2017; or
  • The taxpayer has been granted amnesty for the tax type as part of the Alabama Tax Delinquency Amnesty Act of 2016. (H.B. 137, Laws 2018, effective March 6, 2018.)

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