State’s tax amnesty deal ends Friday

Louisiana’s delinquent taxpayers have days left to seek a reprieve from penalties in paying their back-owed taxes, with state officials needing strong participation in the amnesty program to keep the budget balanced.

Revenue Secretary Tim Barfield wouldn’t provide specific numbers about dollars already paid through the program, but he said his department has received thousands of applications and the trends suggest the state will hit the $200 million it expected to collect.

The big-ticket negotiations tend to go down to the final days of an amnesty program, as lawyers, accountants and taxpayers haggle over the larger debts owed to the state.

“Really this week is the big week,” Barfield said.

The amnesty program began in September and runs through Friday, Nov. 22.

People and businesses can apply to get caught up on their tax bills without any penalties and with only half the interest charges they would otherwise owe on the debt. The program covers most taxes administered by the Department of Revenue.

Lawmakers assumed the collection of $200 million from the amnesty period this year, and they plugged the money into the state’s $25.4 billion operating budget. Without that cash, they’d face a hefty hole in planned spending for health care services, because the dollars are used to draw down federal Medicaid matching dollars.

“Based on everything I’ve seen, I feel very good, very confident about the budget numbers for this year,” Barfield said.

Louisiana has offered similar programs five other times, the most recent in 2001 and 2009.

Barfield said 443,000 taxpayers owe $1.4 billion in unpaid taxes, while another 3,000 businesses or wealthy individuals who owe $1.1 billion are involved in audits or litigation with the Department of Revenue over unpaid taxes.

Both groups are eligible for amnesty.

But the revenue secretary said the best opportunity to collect on delinquent accounts comes from those involved in audits or litigation, because those cases involve the largest debts.

For example, while the 2009 amnesty program brought in $483 million from more than 40,000 delinquent taxpayers, 85 percent of that – $412 million – came from 600 taxpayers seeking to settle outstanding audit issues or lawsuits with the department, Barfield said.

“A lot hinges on a few taxpayers out there,” he said.

Though the program wraps up next week, Barfield said it will be a week or more before his department can give a tally of how much money was generated by the amnesty period.

The state will offer two additional, one-month amnesty periods in 2014 and 2015, but with less generous terms.