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By Alan J. Preis, CPA

On February 29, 1996, New Jersey Governor Christine Whitman signed legislation (Senate Bill #675 as amended) requiring the director of the New Jersey Division of Taxation ("director" of the "division") to establish a three-month tax amnesty. On March 12, 1996, the director announced that the amnesty period will run from March 15 to midnight, June 1. The amnesty provisions were introduced as amendments to a bill initially intended to authorize the payment of state taxes by credit card, debit card, or electronic funds transfer.

The amnesty applies to all state tax liabilities (other than New Jersey State Unemployment and Disability) for returns due on or after January 1, 1987, and prior to January 1, 1996, entails a waiver of all refund or appeal rights, and is conditioned on the payment of the full balance of tax for which amnesty is sought.

Unlike similar tax amnesties, this New Jersey Tax Amnesty provides for the abatement of penalties and interest.

Amnesty is available to parties who 1) have failed to file tax returns, 2) have filed returns on which tax remains owing, 3) wish to remit additional tax with an amended return, or 4) have controversies pending or assessments outstanding before the division or currently in the courts, except in the case of a taxpayer who at the time of payment is under criminal investigation or charge for a state tax matter.

The legislation conditions the availability of amnesty for matters which are the subject of any administrative or judicial appeal as of the effective date of the amnesty upon the approval of the director. There have been informal indications from representatives of the division that the director may entertain requests for abatement of penalty and interest in such cases.

If a taxpayer eligible to pay taxes under amnesty fails to do so, a five percent penalty will be imposed in addition to all other penalties and interest authorized by law on the unpaid liability. CPAs with clients who could benefit from the amnesty, should contact their state society CPE personnel to learn if any offerings on the subject have been planned *

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