Kentucky is offering a tax amnesty program for individuals and businesses who owe back taxes to the state. The program, which was announced earlier this year, is now open but only for a limited time. In order to participate, you must submit your application by November 30, 2012.

Cheryl Ganim, CPA
Cheryl Ganim, CPA

The program allows taxpayers to pay their unpaid taxes with no penalties or fees and at half the regular interest rate. It applies to taxes incurred between December 1, 2001 and October 1, 2011, and it includes all state taxes except:

  • Real property taxes
  • Taxes on motor vehicles and motorboats
  • County/local tangible and intangible property taxes payable to a local official that have been sent to the state for collection
  • Penalties

The taxpayer also must file all tax returns and make all tax payments on time for the next three years, or the penalties, fees and interest will be reinstated. Kentucky has a list of nearly 170,000 individuals and businesses who are behind on their taxes.

“You have to act fast,” Gov. Steve Beshear wrote, “because after November 30, the penalties, fees and interest will increase, only adding to your debts. Take advantage of this rare opportunity before it’s too late. It’s good for you and good for Kentucky.”

The increase in penalties will include:

  • An additional 2 percent interest on unpaid taxes that are eligible for amnesty
  • A collection fee of 25% on all taxes which are or become due
  • An additional 50% fee for non-filed returns that were eligible for amnesty
  • An additional 25% fee on amnesty-eligible liabilities discovered through an audit

Beshear has said he expects the program to generate around $60 million for the state. For more information on the amnesty program, or any of your tax needs, contact a member of the Barnes Dennig tax team at 513.241.8313.

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