The deadline is fast approaching for a program offering incentives for businesses and individuals to pay unreported and under-reported state taxes.
CT Fresh Start, which launched last October, ends November 30, 2018.
That means if you are a business or individual that has outstanding state tax obligations, you still have a few months to report and pay your tax obligations to the state.
In exchange, the state Department of Revenue Services will not impose penalties and will significantly reduce interest on the reported taxes.
So far, more than 20,000 applicants have used Fresh Start. If you or your business owe taxes, the sooner you pay, the more savings you'll realize as the interest on overdue taxes accrues monthly.
But if you continue to neglect your obligations, you also run the risk of getting selected for an audit, which disqualifies you from Fresh Start.
DRS is about to begin a large scale, individual non-filer audit campaign.
The program is generally open to businesses or individuals that failed to file a tax return, or failed to report the full amount of tax on a previously filed return, for any return due on or before December 31, 2016.
Applicants accepted into the program must agree to file on time all required tax returns and pay any associated tax to the state for the three years after the date of the Fresh Start application.
In exchange, Fresh Start offers the following benefits:
- No penalty
- Interest reduced by 50%
- In certain circumstances, a limited look-back period for non-filers
- No criminal prosecution.
Taxes that do not qualify for Fresh Start include: federal taxes administered by the IRS, local property, and state payroll taxes, or fees owed to the Secretary of the State.
Before beginning the application process, you must know the tax type, tax period, and amount you owe for each period.
You should complete a state tax return or an amended return for each period as a worksheet to assist you in completing the application.
These returns do not have to be filed with your Fresh Start application but should be used as a guide to ensure accurate payment.
When calculating the amount of additional tax you owe, account for any payments you have previously made against the tax, and verify the amount of your estimated tax payments, withholding, or extension payments before beginning the application.
For additional information, visit the CT Fresh Start website or call 877.729.6691.