Resources

Articles & Tips

Tax Tidbit 5/09: New Jersey Tax Amnesty Program

The New Jersey Division of Taxation is offering a tax amnesty program for taxpayers that will run from May 4 through June 15, 2009.  The program offers taxpayers the chance to settle their old accounts with the Division of Taxation at a minimal cost.  New Jersey had similar tax amnesty programs in 1987, 1996, and 2002.

All taxes administered by the Division of Taxation are eligible for amnesty.  These include, but are not limited to:

• Individual income tax (resident and non-resident)
• Corporate business tax
• Sales and use tax
• Partnerships
• Estates and Trusts
• Litter Control Fee
• Estate and Inheritance Tax
• New Jersey Gross Income Tax Withholding

However, taxes not administered by the Division of Taxation (such as local property taxes) are not eligible for amnesty.  As a result, unemployment and disability tax (which is administered by the Department of Labor) is not eligible for amnesty, while gross income tax withholding (which is administered by the Division of Taxation) is eligible for amnesty, even though both of these taxes are on the same Form NJ-927.

Amnesty applies to tax returns that are due from January 1, 2002 through January 31, 2009.  This means that annual income tax returns from 2001 through 2007 are eligible, as are quarterly payroll and sales tax returns from 4th quarter 2001 through 4th quarter 2008.  However, tax matters that are currently under criminal investigation or under administrative appeal are not eligible for amnesty.

With the Amnesty program, the taxpayer agrees to pay the entire tax due, plus 50% of the interest due as of May 1, 2009, as well as file all delinquent tax returns.  The taxpayer also agrees to waive any appeal rights to dispute the tax matter.  In return, the Division of Taxation will waive the remaining 50% of interest, all penalties, and all private collection agency recovery fees.  This process is accomplished by having the taxpayer sign an Amnesty Payment/Waiver Statement.  If the taxpayer does not file under Amnesty, the Division of Taxation will assess the full amount of interest, plus penalties at a rate higher than at pre-Amnesty rates.

Most eligible taxpayers will receive an Amnesty tax notice from the Division of Taxation that details the taxes due and/or tax returns to be filed.  The Division of Taxation encourages, but does not require, the taxpayer to file the returns and/or pay the taxes on-line at the special Amnesty website at www.taxamnesty.nj.gov.  This web site is very detailed and should be able to answer all your Amnesty questions.

All Amnesty tax returns and payments must be postmarked or electronically transmitted to the Division of Taxation by 11:59 PM on June 15, 2009.  If you would like more information regarding the New Jersey Tax Amnesty program, please contact Andrew D. Ross, CPA of Bedard, Kurowicki & Co., CPA's, PC (908) 782-7900 x 113 or adr@bkc-cpa.com, or visit www.bkc-cpa.com.                        

Released 5/11/09