Florida Tax Amnesty-Look Before You Leap!!

By June 14, 2010 Amnesty Programs

So Florida has announced an amnesty program for state taxes.  The program is scheduled to run from July 1 to Sept. 30.   In most amnesty programs, you find a balance between the carrot and the stick.  You will pay the back tax and some interest but that’s about it (the carrot).  For companies that don’t participate in the amnesty program you may be denied favorable treatment and penalty abatement on future audits (the stick).  Florida has done something that I have never seen before they are offering the carrot and the stick as part of the same program.  Here’s the deal.

1. Pay all the taxes owed
2. Pay interest of 50%
3. Pay no penalty
4. Pay a 10% administrative fee on the taxes due, the pre-abated interest, and the pre-abated penalty.
5. If you need a payment plan, you can get a 7 month plan with 12.5% down payment
6. Applies to businesses that are under audit

I have never seen an administrative fee assessed on an amnesty program before.  What is Florida thinking? 10%–That’s a deal breaker there.

To make matters even more confusing, the Florida DOR is still running its voluntary disclosure program.  Here are the details:

1. 3 year look back on tax
2. No penalty
3. No administrative fees
4. Reduced interest (just like amnesty program)
5. 12 month stipulated payment plan

This seems like a no brainer to me unless you are under audit or have some other reason why the VDA won’t apply!!  Why pay more tax, more interest, and a 10% administrative fee just to participate in the amnesty program?

If you have any unpaid Florida sales tax, please call me to discuss whether the VDA process or the amnesty program is right for you.  Don’t just assume that the amnesty is best program.

Ned Lenhart
Florida Amnesty Program