STATE TAX REVENUES CLIMB, LOCAL TAX MONEY SLIDES
Albany, N.Y. - State tax revenues increased 10.8 percent in the second quarter of 2011, while revenues for local governments headed south.
The Nelson A. Rockefeller Institute of Government at the University of Albany found that state tax revenues increased 8.4 percent on an annual basis for 46 states in the past fiscal year, giving them six consecutive quarters of growth and the best annual performance since 2005.
Every state except New Hampshire reported an increase in overall tax collections in the second quarter, compared with the second quarter last year.
Preliminary figures for July and August indicate continued growth, though not as strong as in the second quarter. The largest gains in the second quarter came from personal income taxes, which rose more than 16 percent compared with the second quarter of last year.
OFFSHORE DISCLOSURE PROGRAM BOOSTS COMPLIANCE
Washington, D.C. - The Internal Revenue Service's Offshore Voluntary Disclosure Initiatives are generally effective at convincing thousands of taxpayers with foreign bank accounts to come forward and disclose them to avoid heavy penalties and criminal prosecution, but some improvements are needed, according to a new report by the Treasury Inspector General for Tax Administration, which noted that the IRS's 2009 Offshore Voluntary Disclosure Initiative prompted nearly 7,000 taxpayers in 2009 and over 10,000 taxpayers in 2010 with hidden offshore assets and income to disclose them. The IRS announced a 2011 OVDI in February with stiffer penalties.
TIGTA recommended that IRS officials implement a requirement for taxpayers to provide a detailed reconciliation of their unreported income. The IRS should also develop a quality review process to ensure that all the data relating to voluntary disclosures are properly transcribed for future data mining, and require revenue agents to initial each page of the voluntary disclosure agreement before submitting it to taxpayers for their signature.
