Tax Amnesty Act

Providing for a Tax Amnesty Program

Summary

This Act provides for a tax amnesty program, which can be used by a city, county, municipality, or state to ensure that such tax amnesty program is implemented and administered in order to maximize both efficiency and revenues for the government entity authorizing the program.

Model Policy

Section 1. {Short Title}
This Act shall be known and may be cited as “The 20XX Tax Amnesty Act.”

Section 2. {Definition}

For the purposes of this act the following term shall have the following definition ascribed to it:

(A) “Contingency fee” is defined as any fee for services provided where the fee is payable only if there is a favorable result. Contingency fees are usually calculated as a percentage of the client’s net recovery.

 

Section 3. {Statement of Purpose}
(A) For the purpose of encouraging the voluntary disclosure and payment of taxes owed to {cite government entity}, it is the intent of this legislature to authorize the director of the {cite government entity} to establish a tax amnesty program for eligible taxes, as provided in this section.

(1)   Notwithstanding the provisions of any other law to the contrary, with respect to taxes administered by the department of {cite government entity} an amnesty from the assessment or payment of all penalties and interest shall apply with respect to unpaid taxes or taxes due from September 15, 20XX to November 15, 20XX

(2)   The amnesty shall apply to individual and business tax liabilities due but unpaid on or before December 31, 20XX, or to such taxes that are due but unpaid since the end of the {cite government entity’s} previous tax amnesty program of {month day, year}.

(3)   The amnesty shall not apply to any taxpayer who at the time of payment is under criminal or civil litigation in this state or {cite government entity}.

Section 4. {Implementation and Administration}
(A) The director of {cite government entity} is authorized to promulgate rules or administrative guidelines necessary to administer and execute the tax amnesty program.

 

(B) The director of {cite government entity} is further authorized to enter into agreements with one or more third party vendors that have previous experience advertising, administering, and collecting revenues from tax amnesty programs at the municipal, state, or federal level in order to assist with the administration and execution of {cite government entity’s} tax amnesty program.

(1)   The selection of third parties by the director of {cite government entity} to advertise, administer, collect, and execute the amnesty program shall occur after a competitive procurement process limited to third parties that have not previously attempted to collect on any portion of the unpaid taxes owed to the {cite government entity}.

(2)   Payments to third parties selected in the procurement process to administer, collect revenues, and execute the amnesty program shall be paid under a contingency fee agreement from a portion of the proceeds collected pursuant to subsection A of Section 3 of this act.

Section 5. {Post-Amnesty Payment Plan}
(A) A taxpayer electing to participate in the amnesty plan created in Section 3, who is unable to pay in full, shall be authorized to participate in a post-amnesty program payment plan.

(1)   In order to participate in the payment plan, a partial payment equal to a minimum of one-third of the balance due, and a signed agreement to take part in the amnesty program must be provided to the {cite government entity} by November 15, 20XX.

(2)   The amnesty program payment plan for the remaining balance shall not be longer than six (6) months and all payments agreed to under the amnesty program must be received by May 15, 20XX.

Section 6. {Default}
(A) If any eligible individual or business tax is not paid during the tax amnesty period, or during the post-amnesty payment plan period, the penalty and interest waived under the terms of the amnesty program shall be added thereto and deemed payable immediately.

 

Section 7. {Severability Clause}

 

Section 8. {Repealer Clause}

 

Section 9. {Effective Date}

(A) Because immediate action is necessary to secure adequate state revenue, this act is deemed necessary for the immediate preservation of the public health, welfare, peace, and safety, and is hereby declared to be an emergency act within the meaning of the {cite government entity’s} constitution, and this act shall be in full force and effect upon its passage and approval.

 

 

Adopted by the Tax and Fiscal Policy Task Force at the Spring Task Force Summit May 3, 2013. Approved by the ALEC Board of Directors, August 5, 2013.

 

Keyword Tags: Tax and Fiscal Policy Task Force

Task Forces