Due to system errors, Louisiana is delaying the start of its 2015 Tax Amnesty Program (“Program”), which will now begin on December 1, 2015 and end on December 31, 2015. The scopes and benefits of the Program have not changed. Louisiana published its release regarding the delay on November 17, 2015.
The Program applies to all taxes administered by the Louisiana Department of Revenue (“Department”) except motor fuels taxes and penalties for failure to submit information reports that are not based on an underpayment of tax. Eligible taxpayers who apply during the authorized amnesty period and are approved by the Secretary will receive a waiver of 17% interest and 33% penalties that would otherwise be owed on the unpaid taxes. By current law, this will be the last amnesty program offered by the Department until 2025.
The Department is preparing to mail amnesty invitations to potentially qualified taxpayers, along with procedures that the taxpayer should follow to ensure acceptance into the Program. Additional announcements and Program information can be found on the Department’s website at www.ldrtaxamnesty.com.
Amnesty is available for the following taxes:
- Taxes for periods that began prior to January 1, 2015;
- Taxes due prior to January 1, 2015, for which the Department has issued a proposed assessment, notice of assessment, bill, notice, or demand for payment not later than May 31, 2015; or
- Taxes for which a taxpayer and the Department have agreed to interrupt and suspend the running of the statute of limitations until December 31, 2015.
This is the third and final of three amnesty tax periods that were authorized in 2013 by the Louisiana Legislature in House Bill 456 (“H.B. 456”). In 2014, the Legislature passed House Bill 663 (“H.B. 663”), which made several changes to the original Tax Amnesty Act, including an adjustment to the penalty and interest waivers applicable to both the 2014 and 2015 amnesty periods. The revisions and updates included:
- 2015 amnesty interest waiver increased from 0% to 17% and penalty waiver increased from 10% to 33%.
- Taxpayers who have a final judgment rendered against them in court or who have exhausted all rights to protest taxes owed within 90 days after the end of the amnesty period shall be subject to double penalties if they choose to not apply for amnesty during the one-month program.
- If the taxpayer is not currently involved in a field audit or other litigation, the taxpayer may also enter into an installment agreement. Installments are set up via automated electronic transaction withdrawal payments on a monthly basis with equal installment payments and must include an initial down payment of at least 20% of the total amount owed.
- Taxpayers now also have the option to make a one-time payment of non-disputed tax due and associated 83% interest and 67% penalty, and dispute the remaining portion of the taxes owed via a compromise amount. The Department will have 30 days, beginning after the amnesty period, to review disputed items. If the Department approves the compromise amount, no additional payment will be due. If the Department rejects the compromise, full tax, interest, and penalty will be due on the remaining balance.
All final payments, lump-sum or installment payments, must be received by the Department no later than May 1, 2016. If final payment is not received by May 1, 2016, amnesty will not be granted, and the taxpayer will owe the previously waived interest and penalty balances, as well as any subsequent interest accrued and other applicable fees.
Taxpayers also are precluded from protesting or initiating an administrative or judicial proceeding with regard to any tax paid under the Program. Taxpayers involved in field audits or litigation may participate in the Program but must abide by the Department’s interpretation of the law with respect to issues resolved through the Program for the succeeding three years. In addition, the Department will not pay interest on refunds for amounts paid under the Program.