Tax Amnesties: Evaluating the Latest State Offers

Analyzing Penalty, Interest, Lookback and Other Terms Amid States' Expanding Nexus Policies

Recording of a 110-minute CPE webinar with Q&A


Conducted on Thursday, February 11, 2010

Recorded event now available

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Program Materials

This webinar will examine the pros and cons of general state tax amnesties for multi-state business taxpayers, both in the context of an overall tax planning strategy and by analyzing the terms of individual states' upcoming amnesties.

Description

As financially desperate state governments push the envelope on tax nexus policies (the "Amazon tax" laws in New York and other states offering a prime example), corporate taxpayers have much motivation to consider amnesty programs that limit their penalty and interest exposure for prior years.

Multi-state companies don't lack for amnesty deals to analyze. In 2009, no fewer than 18 states or large localities held tax amnesties. Illinois, Pennsylvania, New York, Massachusetts and Washington, D.C. already are slated to hold general amnesties sometime in 2010; more states are sure to follow.

This is not a cut-and-dried decision. How far back will the state look for tax obligations? How much will penalties and interest be cut? Would a voluntary compliance initiative be more advantageous? Could you be exposed to heightened enforcement and penalties if you don't participate?

Listen as our panel of veteran tax advisors offers a framework to evaluate the advantages and disadvantages of participating in state tax amnesties, within the framework of a multi-state taxpayer with potential obligations in a number of states.

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Outline

  1. Factors leading to proliferation of general tax amnesties
    1. Extreme shortfalls in state and local revenue collections
    2. Broad expansions of tax nexus-triggering concepts
  2. Key terms of upcoming and recent state and local amnesties
    1. 2010 amnesties including Illinois, Pennsylvania, Massachusetts, New York and Washington, D.C.
    2. 2009 amnesties including Alabama, Arizona, Connecticut, Delaware, Hawaii, Louisiana, Maryland, Maine, New Jersey, Oregon, Virginia, Vermont, Los Angeles, Phoenix and New Orleans
    3. Interest, penalty, lookback and participation cut-off terms
  3. Factors influencing a decision to participate or decline an amnesty
    1. Prospects of reducing total exposure for prior years and avoiding non-participation penalties
    2. Balanced against relinquishing company’s position against an assessment

Benefits

The panel will address these and other relevant topics:

  • Terms of individual amnesty programs: What are the terms for interest and penalty reductions, lookback periods and cutoff dates for upcoming amnesties, and how do they compare with the 2009 programs?
  • Potential advantages: Could your company cut its prior-years obligation in a particular state? If so, by how much, and could it avoid any future proceedings?
  • Potential disadvantages: Could your company expose itself to a prolonged lookback and start a domino effect with tougher oversight by other states?
  • Evaluating whether to say no: Does your company have a strong case against a tax assessment, or could other avenues than amnesty participation be the smart play?

Faculty

Gary Bingel
Gary Bingel
Director, State and Local Tax
Amper Politziner & Mattia

He has more than 15 years of experience in state and local income and sales and use tax consulting, particularly in...  |  Read More

Patrick Duffany
Patrick Duffany

Tax Partner
J.H. Cohn

He specializes in multi-state taxation, particularly with regard to New York and Connecticut. He has more than 20 years...  |  Read More

Michael Jacobs
Michael Jacobs

Partner
Reed Smith

He is a member of the firm's State Tax Group and his practice emphasizes state tax planning in business...  |  Read More

Karen Currie
Karen Currie

Jones Day

Her practice is in multi-state taxation, particularly in the state and local tax aspects of business acquisitions,...  |  Read More

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