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Multistate Tax Alert: Ohio General Tax Amnesty Program deadline approaches

Ohio’s General Tax Amnesty Program (Amnesty) starts on May 1, 2012 and ends June 15, 2012. Taxpayers with unpaid qualifying taxes due and payable prior to May 1, 2011 can enter Amnesty and pay the amount due without penalty and only half of the normal interest. Taxes covered under Amnesty include:

  • Sales
  • Seller’s use
  • Commercial activity
  • Personal income
  • School district income
  • Corporation franchise
  • Cigarette
  • Motor fuel
  • Dealer in intangible
  • Estate
  • Natural gas excise

Unpaid amounts do not qualify for Amnesty if the taxpayer has received a notice of delinquency, bill or assessment or where a notice of audit has been issued related to such unpaid taxes.

Caution

Taxpayers considering Amnesty should analyze their options to ensure they are receiving the best possible deal from the Department as Amnesty may not produce the best result. The Department is still allowing taxpayers to apply for a voluntary disclosure before or during Amnesty. Since the terms for a voluntary disclosure are different than Amnesty, taxpayers need to consider if a voluntary disclosure would provide a better result. Right now voluntary disclosure provides an added benefit in that a taxpayer does not have to wait until May 1, 2012 to participate. Voluntary disclosure will protect a taxpayer from receiving a notice (delinquency, bill, assessment, or audit) and then being disqualified from Amnesty.

Taxpayers should also analyze their tax positions prior to entering Amnesty or voluntary disclosure as any amounts remitted are typically nonrefundable or are not appealable. Taxpayers may want to consider negotiating a written settlement instead of Amnesty for certain tax positions to help ensure the best result.

Our Multistate Tax Practice is experienced with analyzing prior compliance and determining the appropriate amount of tax that should be paid. Further, we have the experience with completing voluntary disclosures or written settlements that help our clients obtain the best results possible.

If Amnesty is right

To participate in Amnesty, taxpayers must:

  • Register as a taxpayer (if unregistered for the tax you are applying for)
  • Complete and sign the appropriate Amnesty application1
  • Complete and sign the appropriate tax return(s)
  • Make full payment for the total amount due (including half of the normal interest)

Taxpayers should also consider resolving any unpaid tax for tax periods not covered by Amnesty (all periods after May 1, 2011), which may include voluntary disclosure or written settlement.

Consumer’s Use Tax Amnesty (CUT Amnesty)

Consumer’s Use Tax is covered under a separate amnesty that runs from October 1, 2011 through May 1, 2013. CUT Amnesty covers the periods starting January 1, 2009 through the month prior to entering CUT Amnesty. A payment plan of up to 84 months may be available. Benefits include no penalty and possibly no interest. For more details on the CUT Amnesty, please refer to the Multistate Tax Alert: Ohio has enacted two tax amnesties: Significant tax savings are available.

1Each tax is filed on a specific application, so a taxpayer may need more than one application depending on the type of taxes being paid.

If you would like to discuss how these Amnesty opportunities could help you, please contact:

John R. Trippier
(non-attorney professional)
614.458.0042
jtrippier@mcdonaldhopkins.com

Adam L. Garn
614.458.0032
agarn@mcdonaldhopkins.com

Multistate Tax Practice

Businesses must be vigilant and careful in managing their state and local tax liabilities and exposures. This can be a daunting task. We provide a broad range of state and local tax services including tax planning, tax controversy, real estate tax abatement and exemption, and tax policy advocacy. With professionals who have worked both inside and outside government agencies, the multistate tax team leverages its knowledge and experience to help clients control their complex multistate taxes.

Carl J. Grassi, President
600 Superior Avenue, East, Suite 2100, Cleveland, Ohio 44114
Chicago
312.280.0111
Fax: 312.280.8232
Cleveland
216.348.5400
Fax: 216.348.5474
Columbus
614.458.0025
Fax: 614.458.0028
Detroit
248.646.5070
Fax: 248.646.5075
Miami
1.305.704.3990
Fax: 1.305.704.3999
West Palm Beach
561.472.2121
Fax: 561.472.2122
IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with requirements imposed by the Internal Revenue Service, we inform you that any tax advice contained in this communication (including any attachments), was not intended or written to be used, and cannot be used, by any taxpayer for the purpose of (1) avoiding any penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any transaction matter addressed herein.

© 2012 McDonald Hopkins LLC All Rights Reserved. This Alert is designed to provide current information for our clients, friends and their advisors regarding important legal developments. The foregoing discussion is general information rather than specific legal advice. Because it is necessary to apply legal principles to specific facts, always consult your legal advisor before using this discussion as a basis for a specific action.