Connecticut’s 2021 Tax Amnesty Program (“Program”) began on November 1, 2021. The Program offers individuals and businesses the opportunity to file and pay outstanding taxes at a reduced interest rate without penalties. The Program and its parameters were included in the provisions of state budget legislation, House Bill 6689, and Senate Bill 1202, enacted June 23, 2021.
All taxes administered by the Connecticut Department of Revenue Services (DRS) are eligible for tax amnesty, except for the Connecticut motor carrier road tax. The Program provides a 75% reduction in interest, waives penalties, and eliminates the possibility of criminal prosecution for individuals and businesses who have not filed, have underreported, or have existing liabilities related to taxes owed to Connecticut for any tax period ending on or before December 31, 2020. Also eligible for the Program are individuals and businesses generally excluded from Connecticut’s voluntary disclosure program for having previous contact with DRS: those currently under audit by DRS for periods ending on or before December 31, 2020; those with a protest pending before DRS’s Appellate Division; and those currently pursuing civil litigation with DRS. In contrast to the voluntary disclosure program, the Program does not include a limited look-back provision. Although only 25% of applicable interest is due under the Program, taxpayers who participate are expected to become compliant with all applicable periods for the tax(es) at issue, which could exceed an available look-back period under a voluntary disclosure agreement.
The Program is in effect from November 1, 2021 through January 31, 2022. Tax amnesty applications must be filed electronically and payment made in full by January 31, 2022. Upon application approval, the taxpayer relinquishes all rights to an appeal, credit, or refund for taxes included in the application. Taxpayers with DRS closing agreements, managed audit agreements, and accepted offers in compromise are not eligible for the Program. Also ineligible are parties to any criminal investigation or criminal litigation pending on July 1, 2021, in any federal or Connecticut court. After the Program deadline, all individuals and businesses with unresolved tax liabilities will be subject to the full interest rate, penalties, and possible criminal prosecution, although certain taxpayers may still be able to participate in Connecticut’s voluntary disclosure program.
For more information on Connecticut’s 2021 Tax Amnesty Program, please contact a Ryan National Tax professional to assist you.
For tax developments in other states, please refer to Ryan News & Insights.
TECHNICAL INFORMATION CONTACTS:
Brian Stromen
Principal
Ryan
763.445.4200
brian.stromen@ryan.com
Christopher Potter
Director
Ryan
781.359.3800
christopher.potter@ryan.com
The material presented in this communication is intended to provide general information only and should solely be seen as broad guidance and not directed to the particular facts or circumstances of any individual who may read this publication. No liability is accepted for acts or omissions taken in reliance upon the content of this piece. Before taking (or not taking) any action, readers should seek professional advice specific to their situation from Ryan, LLC or other tax professionals. For additional information about this topic, please contact us at info@ryan.com.