California is preparing to kick off its first tax amnesty program in two decades, in hopes of narrowing its whopping budget deficit.
The state, which faces an $8.6 billion budget deficit, hopes to collect from $300 million to $600 million through the program, according to a report by the San Francisco Chronicle.
California's Franchise Tax Board this month said that it would issue an estimated 85,000 involuntary enforcement actions against tax debtors, including earning withholding orders attaching to wages and payments made to contractors, and bank withholding orders seizing bank account funds. The FTB will also contact nearly 600,000 individuals who failed to file a tax return last year.
Under the amnesty program, which will run from Feb. 1 through March. 31, individual and business taxpayers who owe income, franchise, sales or use taxes can avoid criminal prosecution and get most penalties and fees waived by paying the tax and interest.
California individual and business taxpayers are eligible for amnesty for taxable years beginning before Jan. 1, 2003, if they did any of the following:
-- Did not file the required California tax returns;
-- Underreported income on a previously filed tax return;
-- Claimed excessive deductions; or,
-- Didn't pay previously assessed taxes, interest, penalties or fees.
For details visit www.taxes.ca.gov.
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