Alert: Colorado Tax Amnesty Bill is Enacted

Governor Hickenlooper signed Senate Bill 184 on June 3, 2011 which provides for “tax amnesty” to Colorado individuals and businesses who owe back taxes for taxes otherwise due on or before December 31, 2010.

Under this new law, taxpayers may have all penalties waived and the interest on the past due balance of applicable taxes reduced by half. There will be a window from October 1, 2011 through November 15, 2011 for payment of such back taxes in full to qualify for the elimination of penalties and reduction of interest. Time is of the essence in getting any delinquent tax filings made as the amnesty program does not apply to some taxpayers who receive a notice of assessment from the Department of Revenue before actually filing the applicable tax returns.

This opportunity to save significant penalties and interest applies to most income taxes upon individuals and corporations and to tobacco, severance, state sales and use taxes and various other business excise taxes. The Colorado Legislature and Department of Revenue anticipate it may raise approximately $10 million in revenue that would not otherwise be collected or would take an extended period of time to collect. The bulk of the revenue raised under this provision will be earmarked for state education programs which are facing record budget deficits.

Details of how to qualify for this tax amnesty program, forms required to be filed and procedures to be followed will be developed over the coming months by the Department of Revenue. If you know of any individuals or businesses with significant past Colorado tax obligations due who may benefit from this program and who may need legal and tax counsel to qualify for amnesty, please have them contact me to arrange for a consult.

Scott Shires

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