http://mycn2.com/politics/tax-amnesty-program-will-need-teeth-so-as-not-to-encourage-delinquent-filers-rep-farmer-says

Publication Date: January 23, 2012

Author: Nick Storm

Tax amnesty program will need "teeth" so as not to encourage delinquent filers, Rep. Farmer says

The governor’s proposal for a brief window of amnesty for Kentuckians who have failed to file their state taxes recently must include some provisions to make sure it doesn’t encourage once-a-decade filers, state Rep. Bill Farmer said.

Farmer, a Lexington Republican, runs a tax preparation service. And he said he had clients in past rounds of tax amnesty indicate that they might wait to pay their state taxes until the next amnesty period.

“I’m afraid people are going to think the state is going to do this on a regular basis … and skirt the law until it’s to their advantage,” Farmer said. Watch his comments to Pure Politics:

During his budget address, Beshear called for the first tax amnesty program in 10 years, which he said would inject $65 million in one-time revenue from delinquent taxpayers. Beshear is predicating part of his budget on that money.

The theory is that Kentucky is more likely to collect that money from delinquent filers with the amnesty.

Indeed, the last Kentucky amnesty program from Aug. 1, 2002, through Sept. 30, 2002, yielded the state $79.9 million, according to a Center for Tax Policy report.

But some studies, including a 2005 report by two economic professors, warn that such amnesty programs could risk long-term losses in revenues if people simply decide not to file on time.

Farmer said that’s why he is urging Beshear to include safeguards in his proposal to require people to pay taxes each of the next five years or risk being hit with the back-penalties. He said that’s similar to a federal program.

So far, Beshear hasn’t unveiled the details of his proposal. Spokesman Terry Sebastian said no decisions have been made about what, if any, safeguards should be built into the program and whether it will be rolled out as legislation or can be done through executive order.

- Interview and video by Nick Storm with additional reporting by Ryan Alessi

Nick Storm
About Nick Storm

Nick Storm joined cn|2 in December 2011 as a reporter for Pure Politics. Throughout his career, Nick has covered several big political stories up close, including interviewing President Barack Obama on the campaign trail back in 2008. Nick says he loves being at the forefront of Kentucky politics and working with the brightest journalists in the commonwealth.

Comments

  • Bill Huff wrote on January 27, 2012 08:06 PM :

    From 1965 through April 1994 Kentucky had approximately 2 tax amnesty programs under Governors’ Wilkinson and Patton that brought in around $60,000,000 tax dollars but excused some combination of penalty and interest.

    However, so far no Kentucky tax amnesty program has addressed passenger car usage and property tax or truck weight-distance tax evasion!

    Kentucky Passenger car tax evasion estimated at $300,000,000 tax dollars.

    Kentucky truck weight-distance tax evasion in 1994 estimated one-out-of-four Kentucky truck owners did not pay Kentucky truck weight-distance taxes.

    In 2012 it is estimated $100,000,000 tax dollars uncollected from truck tax evaders.

    So there’s an estimated $400,000,000 dollars of tax evasion skewing tax burden among Kentucky car and truck owners!

    There’s $400,000,000 of corporate tax shelters reducing corporate taxes;

    There’s $350,000,000 of tax exemptions, deductions, credits, exclusions, deferments and perferential tax rates reducing state’s biennium budgets.

    In addition Kentucky’s non-merit payroll (political appointees) personnel payroll inflated by $100,000,000 dollars of non-merit salaries $100,000 annually or more.

    Why not forget amnesty programs and just collect Kentucky taxes not being totally complianced.

    State Police Commercial Enforcement Officers are only state agency with KRS authority to compliance passenager car titling and registration that has property and usage tax evasion properties. Over 200,000 Ky car owners not Kentucky titling & registration their motor vehicles operating daily on Kentucky highways…FREE!

  • Bill Huff wrote on January 30, 2012 10:39 AM :

    Past Kentucky Tax amnesty programs excluded motor vehicle tax evasion.

    Such motor vehicle tax evasion exists in 2012 but was not addressed in Governor’s 2012-2014 budget. Should be addressed in any 2012-2014 tax amnesty program.

    Tax amnesty programs exempt irresponsible taxpayer from penalties, thereby rewarding these irresponsible taxpayers. Such tax amnesty programs provides “special treatment” for small number of taxpayers’ who, unlike all those compliant taxpayers in their class,has not paid their taxes. If one does not pay their fair share of tax burden there should be consequences for their irresponsible actions. Tax amnesty rewards “outlaws” rather than inflicting consequences upon their irresponsible behavior!

    Also, Wayne’s tax reform bill should be passed because it has compassion for Kentucky’s poor and middle class taxpayers.

    Farmers tax reform bill treatment of income tax, which treats poor, middle and wealthy classes of taxpayers fair as others taxes do not, will be eliminated. This means poor and middle class will pay more than their fair share.

What do you have to say?





SUBSCRIBE NOW

Subscribe to email updates.

Subscribe and get the latest political intelligence delivered to your inbox.

MyCN2 Twitter Feed

Pure Politics with Ryan Alessi

Copyright © 2012 cn|2