I knew we would circle back to this issue. On June 27, 2013, my colleague Ben Blair reported in a blog post: “Several months ago, the Indiana Department of Revenue began issuing letters of finding in cases where claimants had failed to pay the [sales / use] tax on the claiming transactions. As improbable as it sounds, the issue became significant enough that the Indiana General Assembly included an ‘Amnesty Program for Unpaid Use Tax on Claimed Race Horses’ in this session’s biennial budget.” The Department has now issued Commissioner’s Directive #47 (effective July 1, 2013) to provide guidance on the program. The directive states in part:
QUALIFICATIONS FOR AMNESTY PROGRAM
The amnesty program applies to unpaid use tax liabilities for claiming transactions occurring before June 1, 2012. Taxpayers in the following situations are eligible to participate in the amnesty program:
- A taxpayer with an outstanding use tax liability that is due and payable to the department for an eligible tax period;
- A taxpayer who properly protests a liability in accordance with IC 6-8.1-5-1;
- A taxpayer who has a departmental hold on a tax liability payment resulting from an audit, a bankruptcy, a taxpayer advocate action, a criminal investigation, or a criminal prosecution;
- A taxpayer who negotiated a payment plan on or prior to June 1, 2013, with the department, a sheriff, a collection attorney, or a collection agency, and who had an unpaid liability during an amnesty-eligible tax period;
- A taxpayer who filed a sales or use tax return for an amnesty-eligible tax period but underreported the tax liability that was actually due; or
- A taxpayer who has not filed a sales or use tax return or paid taxes for an amnesty-eligible tax period and has not been assessed by the department.
The directive emphasizes, “The amnesty program does not apply to a taxpayer’s state gross retail or use tax liability from any other type of transaction.”
THE AMNESTY PERIOD
The amnesty period runs from July 1, 2013, up to and including December 31, 2013. As to this deadline, photo finishes are not recommended. The Department declares, ”No extensions of payments are permitted unless the taxpayer has established a payment plan agreement with the department.”
WHAT IS THE “PRIZE”?
A taxpayer who voluntarily, timely, and correctly participates in the program has the Department’s “assurance” that:
- The Department shall abate and not seek to collect any applicable interest, penalties, collection fees, or costs related to those tax liabilities that are paid under amnesty;
- The Department shall release any liens that are imposed after the full amount of the applicable tax liability is paid;
- The Department shall not seek civil or criminal prosecution against any individual or entity that participates in the amnesty program. The provision not to seek any civil or criminal prosecution applies only to use tax liabilities that are included in the amnesty program; and
- The Department shall not issue or, if already issued, shall withdraw an assessment, a demand notice, or a warrant for payment for liabilities paid under the amnesty program.
However, the Department advises that amnesty is a one-time option: “A taxpayer who participates in this amnesty program is not eligible to participate in any future amnesty programs. A taxpayer who participated in a prior amnesty program is not eligible to participate in this amnesty program.”