Owe past taxes? CT waives big penalties for delinquents

State officials will waive penalties and most interest during the next two months in hopes of recovering at least $35 million from Connecticut’s tax delinquents.

And while this marks Connecticut’s fifth amnesty program since 1990, Department of Revenue Services Commissioner Kevin B. Sullivan said the latest features a new, stiff penalty for those who still refuse to pay back taxes.

“This is a chance for taxpayers to do the right thing and the smart thing,” Sullivan said of the new program, which starts today and runs through Nov. 15.

An estimated 80,000 residents and businesses in total are currently delinquent, owing about $400 million. 

“That is a moving number, and it moves from month to month,” said John Biello, the department’s tax division chief.

The program, open to residents and businesses, waives all penalties and reduces by 75 percent all interest owed on all delinquent state taxes, except for the motor carriers tax. All major levies, including the income, sales and corporation tax are included.

Federal and municipal taxes are not part of the program. Also, taxpayers under criminal investigation or prosecution, or who are party to a DRS audit or closing agreement, are not eligible.

Gov. Dannel P. Malloy first proposed the latest amnesty program in February.

The governor’s fellow Democrats in the legislature’s majority incorporated the program into the new budget they adopted in June — a move criticized by Republican lawmakers as one of several gimmicks used to postpone dealing with fiscal problems until after the 2014 gubernatorial elections.

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, Sullivan noted that the legislature 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.

“That is a big penalty and it’s a lot to pay,” the commissioner added. “If you don’t take advantage of amnesty, you have to ask yourself: Am I truly feeling lucky?”

Rep. Patricia Widlitz, D-Guilford, co-chairwoman of the legislature’s tax-writing Finance, Revenue and Bonding Committee, said the General Assembly’s $35 million estimate for this amnesty program is conservative.

“People get behind in their taxes for very good reasons,” she said. “This is an opportunity for people to catch up.”

Further information may be obtained on the program website at www.makeitrightCT.com and on the department’s Facebook and Twitter pages.