On July 1, 2018, Governor Murphy signed Assembly Bill No. 3438 (A3438) into law, which establishes a tax amnesty program in New Jersey that is applicable to any state tax due on or after February 1, 2009, and prior to September 1, 2017. The new law establishes an amnesty period not to exceed 90 days and creates a five (5) percent penalty for eligible taxpayers who fail to pay during the amnesty period.
Specifically, this 90-day period begins on November 15, 2018 and ends on January 15, 2019, and in order to qualify for the amnesty, the taxpayer must file a return for the tax due on or before the last day of the amnesty period. The five (5) percent penalty for failing to participate cannot be set aside, and is in addition to the tax owed, along with applicable penalties, costs, and interest.
Tax Amnesty Program Offers Relief to New Jersey Taxpayers
The amnesty program provides an opportunity for eligible taxpayers to file and pay their past due taxes with reduced interest and no penalties. The program offers complete forgiveness of all penalties and half of the balance of accrued interest that is due as of November 1, 2018. Eligible taxpayers will not be required to pay one-half of their accrued interest due as of November 1, 2018, and all delinquency fees and penalties would be eliminated.
It should be noted, however, that any civil or criminal fraud penalties will not be waived, and the amnesty does not extend to any taxpayer who at the time of payment is under criminal investigation or charge for any tax matter. Finally, an eligible taxpayer that participates in the amnesty program would automatically waive his rights of appeal with respect to the outstanding tax years in question.
The law also applies to amounts being audited or contested with the Division of Taxation and applies to all state taxes administered by the Division, including gross income, sales and use tax, corporate business tax, and more. The law does not apply to unemployment-related taxes administered by the Department of Labor.
New Jersey Tax Attorneys at Your Side
If you have any unfiled tax returns or any unpaid balances for the tax years covered by the amnesty period, contact the attorneys at Sandelands Eyet LLP to discuss whether taking advantage of the amnesty period makes sense for you. Matthew Eyet is a Partner at Sandelands Eyet LLP, and his practice focuses primarily on representing clients in tax controversy matters before the Internal Revenue Service and state taxing authorities.
Call Sandelands Eyet LLP at (908) 470-1200 to discuss your tax issue.