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7 tax amnesties on tap

By Kay Bell ·
Thursday, August 26, 2010
Posted: 4 pm ET

Have you been looking over your shoulder for the tax collector? If you live in in Florida, Illinois, Kansas, MaineNevadaNew Mexico or Washington, D.C., you might be able to stop worrying. 

Those locations are in the midst of or about to start tax amnesties. They are just the latest to jump on board the tax amnesty train.

Yep, these are exactly what the dictionary says they are: an act of forgiveness for a past offense. In theses specific states and cases, the forgiveness is for past tax offenses.

The reason the state and D.C. tax officials are being so merciful? They need your money and they've decided it's better to get some of it without having to go to a lot of trouble. Bascially, tax amnesties offer local jurisdictions a very good return on their effort.

The return for taxpayers is good, too.

Taxpayers who 'fess up and pay their back taxes usually get penalties and interest waived, at least partially. They also escape the possibility of criminal prosecution for their tax tardiness.

Even better, tax amnesties typically shut the door on additional audits by limiting the look-back period. That means the tax office won't be examining your returns from untold years ago.

Right now, tax amnesties are underway in FloridaNevadaNew Mexico and the District of Columbia. All of these run through Sept. 30.

Next week, specifically on Sept. 1, tax amnesties begin in Kansas and Maine. The Kansas tax forgiveness period runs through Oct. 15. Maine's tax amnesty period will be open through Nov. 30.

Then on Oct. 1, Illinois will kick off its tax amnesty program. Taxpayers in the Land of Lincoln can pay up old tax bills through Nov. 8.

What if you owe back taxes, but not in one of these six states or D.C.? You still could get some help from your state tax department. Many states offer year-round voluntary compliance programs that allow delinquent taxpayers the option to get their taxes in order without fear of more serious retribution.

While states get money and taxpayers who owe get off the tax hook a bit, the one big drawback is that those who've paid their taxes on time often view tax amnesties as rewards for bad behavior.

But given the current economy and the trouble states are having making ends meet, tax amnesties aren't going away. That means you and I who pay our taxes on time just have to deal with this apparent tax inequity.

Have you ever participated in a tax amnesty? Do you think people who take advantage of these programs are getting off too easily?

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