Late on Your Taxes? Take Advantage of Ongoing City, State and Federal Tax Amnesty Programs

Jennifer Goodrum Featured News

October 25, 2011

Colorado Tax Amnesty Program
The State of Colorado is offering a grace period to pay outstanding individual and business state taxes including:

  • Personal, corporate and partnership income taxes,
  • State sales and use tax, and
  • City/county sales and use tax collected by the Colorado Department of Revenue.

If you failed to file a past state tax return in a timely manner or accidentally underreported taxes on a previous return, this is a great opportunity to fix the oversight and avoid most of the associated tax penalties (both criminal and monetary). The program runs Oct. 1, 2011 through Nov. 15, 2011.

This amnesty program applies to most state taxes that were due before Dec. 31, 2010. It does not provide assistance for 2010 Colorado income tax that was due on Apr. 18, 2011. It is also not available to taxpayers who are already involved in a criminal investigation for tax evasion or to tax amounts listed in a past delinquency notice.

Taxpayers may set up a payment plan to pay any outstanding balances. The amount of the tax owed and half any interest due must be paid no later than Dec. 31, 2011.  Click here for more information and to file the amnesty form.

Federal Tax Amnesty Program
In addition, the federal government is offering a limited tax amnesty program. The Internal Revenue Service (IRS) is allowing employers to voluntarily correct misclassifications of employees – modifying classifications as ‘independent contractors’ to ‘employees’ for future federal employment tax purposes.

To participate, an employer must have consistently treated the worker as a nonemployee and must have filed all required 1099 Forms for the prior three years.  Additionally, the employer/taxpayer cannot be currently be under audit by the IRS or by the Federal or State Department of Labor concerning the classification of workers.

Employers participating in this amnesty program will pay 10% of the employment tax liability (Medicare and Social Security) due on the compensation paid to the workers for the most recent tax year. The employer will not be liable for any interest and penalties on the liability, and will not be subject to an employment tax audit with respect to the worker classification of the workers for prior years.

Click here for more information about this program.

Denver Tax Amnesty Program
If you live or practice in Denver, there is a similar amnesty program for city sales tax. The city and county of Denver are extending a grace period for unreported, unpaid city tax. This program applies to both businesses and individuals, and present a great opportunity to get caught up on unreported sales, use and occupational privilege taxes without major tax penalties. Interest charges on delinquent taxes will be reduced by half.  The program runs through Dec. 30, 2011.

Click here for more information and to file the amnesty form.