If you owe Virginia back taxes, watch your mail for a letter about the Tax Amnesty Program 2017.
Earlier this year the Virginia General Assembly enacted provisions approving a tax amnesty program. The Virginia Department of Taxation just started sending letters to persons eligible to participate in this limited time program. The Program runs from September 13 to November 14, 2017.
Why is this amnesty program so beneficial? This ‘savings’ program allows Virginians to bring their state taxes up-to-date more economically. All penalties and 50 percent of the interest will be waived for those who pay their eligible balances within the duration of the program.
The interest rate on unpaid Virginia tax debt has averaged about 5.5 % over the past five years. Taxpayers are then also charged penalties of 6 percent per month after the first month of delinquency up to a maximum of 30 percent of the total tax bill. So your savings could be substantial under the Program.
Now, here is the kicker. At the conclusion of the amnesty period, Virginia will impose an additional 20 percent penalty if you qualify but do not participate in the program — even if you are otherwise qualified.
Due to the short window of opportunity, we suggest that you take action immediately if you think you might be eligible or if you get a letter from Virginia.
YOUR OPTIONS
No application form is required to participate. You can either set-up a payment plan with the Virginia Department of Taxation or pay directly using your 5-digit bill number. If you are a joint filer, be sure to submit your spouse’s name and social security number to ensure the payment/plan covers the two of you.
If you set up a payment plan before or during the program, no additional penalties will be added. Those who do set up a payment plan, however, will not be able to take advantage of the 100% penalty – 50% interest waiver. But, they will avoid the additional 20% penalty.
However, if one fails to make timely payments or fails to comply with the terms of any payment plan at any point during or after the amnesty period, the 20 percent penalty will be applied to the remaining balance.
Going through bankruptcy? If so, you will not receive a letter from Virginia for any bill or debt that is being addressed through a bankruptcy proceeding. However, you may be able to receive amnesty benefits but will need to consult your counsel.
Virginia Tax Amnesty Programs do not come around very often. The last one was in 2009, so if you are eligible, take advantage of this program now!
FOR ANSWERS TO YOUR SPECIFIC QUESTIONS
Go online and search “Virginia Tax QuickPay” for each tax period that you owe. You will need your 5-digit bill number for a specific tax year and your social security number or your business EIN to access the system.
If you have specific questions about your Virginia tax situation or if you do not have a bill number, you may call 1-877-729-8829 for help. The hours of operation are October 2-31 from 8:30 AM – 6:00 PM and November 1-13 from 8:30 AM – 8:00 PM, and Tuesday, November 14 from 8:30 AM – Midnight.
HOW TO PAY
There are two common options for making your payments. You can pay using a debit or credit card; however, a processing fee will apply if you use a credit card. Or, you can send a check by mail payable to the Virginia Department of Taxation, along with the return or bill payment voucher. Postmarks must be no later than November 14, 2017.
Individual Income Tax Payments: PO Box 26179, Richmond, VA 23261-6179
Business Tax Payments: PO Box 2185, Richmond, VA 23261-2185
For further inquiries on participation in the program or assistance in resolving a tax burden, contact the Sodowsky Law Firm at (703) 968-8000.
— Elden Sodowsky
