CT collects more than $175M from delinquent taxpayers

State government collected more than $175 million from delinquent taxpayers over the past two months through its latest amnesty program, Revenue Services Commissioner Kevin B. Sullivan announced Monday.

The two-month program, which officials hailed as the most successful amnesty recollection effort in recent history, waived $32.2 million in interest and penalties.

Gov. Dannel P. Malloy and the legislature used the amnesty to help balance the current budget, assuming the program would collect $35 million. Though a final tally won’t be available for a few more weeks, Sullivan said the total is expected to fall between $175 million and $185 million.

“I think it tells us we underestimated the number of persons and businesses who got in trouble during the last recession,” Sullivan told Capitol reporters during an afternoon press conference.

“It is a good thing for people to have a chance to catch up,” Rep. Patricia Widlitz, D-Guilford, co-chairwoman of the Finance, Revenue and Bonding Committee, said, adding that the $140 million-plus in receipts above the projected level would be deposited into the state’s emergency budget reserve. “Obviously it’s a benefit to all of the taxpayers of the state of Connecticut.”

Just over half of the funds collected through the program, about $91.3 million based upon a preliminary assessment, came from 65 delinquent corporation taxpayers, Sullivan said.

The amnesty program also collected:

  • $55.5 million from 2,633 businesses and individuals who owed sales taxes;
  • $21.4 million from 5,172 businesses and individuals who owed income taxes;
  • And, $6.8 million from 1,927 taxpayers who owed some other state tax.

The single-largest delinquent payment collected was about $20 million, and the oldest owed dated back to 1988, Sullivan said, adding that confidentiality laws prohibit him from releasing the names of particular taxpayers.

The program, which was open to residents and businesses, waived all penalties and reduced by 75 percent all interest owed on all delinquent state taxes, except for the motor carriers tax. The broadest amnesty program ever offered, it was open to taxpayers under audit or embroiled in civil litigation with the state.

Connecticut has offered amnesty to tax delinquents, on average, about every three years in the last decade-and-a-half.

Past amnesty programs and the collections they generated include:

  • 2009, $25 million.
  • 2002, $109 million.
  • 1995, $46 million.
  • 1990, $54 million.

To encourage delinquents to take advantage of this program, officials included a new wrinkle.

The 10 percent interest penalty applied to most delinquent state taxes jumps to 25 percent on any residents and businesses who owe back taxes during the two-month amnesty period — and still refuse to pay.

“This is hardly over,” Sullivan added, “but the amnesty is.”

 

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