With only eighteen days remaining in Philadelphia’s first tax amnesty program in over two decades, the city has already collected more than $7 million in back-taxes, and has received 9,400 applications from tax delinquents embracing the opportunity to make good with the city. Launched on May 3 and concluding June 25, 2010, Philadelphia Tax amnesty allows those delinquents who participate in, and qualify for, the program to have all of their tax penalties waived, as well as pay only half the interest owed.
However, with only 18 days left to apply, the City is emphasizing that time is running out, and that they will aggressively pursue those choosing not to participate with maximum penalties. Details of these actions, and the status of Philadelphia Tax Amnesty to date, as well as steps being taken by the city to enhance the city’s tax filing and collection system were addressed at a press conference on Tuesday, June 8, at 12:30 PM in the Mayor’s Reception Room of City Hall.
“First and foremost, the City of Philadelphia thanks all of the responsible citizens who have been diligent in paying their taxes. Since the launch of Philadelphia Tax Amnesty, we have been making every effort to also embrace those who have struggled to do their part in the past, by creating a solution that works for all of us,” said Mayor Michael A. Nutter. “However, time is quickly running out on this window of opportunity. There are many more people out there who can—and should—take part in Philadelphia Tax Amnesty, and this is their last chance before the City gets tougher than ever before.”
The City is implementing an aggressive strategy to include as many individuals and businesses as possible with the opportunities of the Tax Amnesty program, as well as motivate them to take immediate action. Since May 3, people visiting the city in person, on line or as media viewers have been greeted with Philadelphia Tax Amnesty count-down notices, which serve as reminders of the urgency and help assure they take action before it’s too late. With the highest concentration being in Pennsylvania, New York, New Jersey, Delaware, California and Florida, the City of Philadelphia has tax delinquents in almost all 50 states in the union, and has been using a variety of tactics, including direct mail, targeted advertising, and professional and civic organizations, to reach every one of them.
“When Philadelphia Tax Amnesty ends on June 25th, so does the idea that you can avoid paying your taxes and get away with it. The City has already been turning up the heat on people who avoid their obligations, and we will continue to expand enforcement, seek, find and bring into compliance those who owe the City,” Mayor Nutter continued.
To enforce compliance among those who do not participate and settle up on back taxes before the end of the amnesty period, the City is taking action in a number of ways, including:
- turning tax debts over to lawyers and third party collection agencies for further action;
- fines of $5,000 for failure to file;
- using undercover investigators and IRS information to identify unregistered individuals and businesses
- publication of judgments and liens against delinquent individuals and businesses; and
- increased seizure and sale of property.
In some instances, failure to remit taxes is not just a shirking of a civic obligation resulting in monetary penalties; it’s a crime. There are nine trust fund taxes collected on behalf of the City and Philadelphia School District , including the Wage, Sales, and Liquor Taxes. “Failure to turn over taxes collected from customers, employees, and others is considered theft. These cases will be turned over to the D.A.’s office for potential prosecution and may carry criminal penalties,” said the Honorable Seth Williams, District Attorney for the City of Philadelphia .
Williams went on to reiterate that the best way to avoid criminal penalties is to do the right thing; to pay in full and on time.
In addition to motivating participation in Philadelphia Tax Amnesty and generating awareness of who owes taxes and the consequences of not paying, the City is taking special steps to help make sure all qualified candidates for Philadelphia Tax Amnesty understand the program as well as what they need to do to fully benefit from what is being offered.
“Participating in the Philadelphia Tax Amnesty requires a few simple steps.” said Keith J. Richardson, M.B.A., Commissioner of the City of Philadelphia Department of Revenue. “And virtually all City tax debts from February 1, 1986 to June 30, 2009 are eligible.” Complete eligibility details are available online or by phone.
Commissioner Richardson outlined what individuals and businesses that want to take advantage of the Philly Tax Amnesty will need to do:
- Complete the Amnesty Application
- Register with the City (if needed)
- File all missing tax returns (if needed)
- Disclose all tax liabilities
- Pay all eligible base taxes and 50% of interest by June 25, 2010*
- Stay compliant for the next 3 years
*In cases of financial hardship, debts may be paid one tax year or type at a time during before amnesty ends on June 25th.
As for what comes next after Philadelphia Tax Amnesty time “runs out,” the City is currently taking steps to help enhance filing and payment options, as well as identification of businesses and individuals who should be—but are not—registered with the City and paying taxes.
“Equally as important as collecting back taxes owed to the City of Philadelphia, is putting in place the procedures and laws that can help assure we don’t face a tax delinquent situation such as the one we are currently experiencing,” said Mayor Nutter. “Mandatory e-filing and e-payment, and aggressive pursuit of delinquents as well as increased pursuit of non-registered businesses inside and outside of Philadelphia are just a few examples of our aggressive response to tax delinquency.”
Further details on Philadelphia Tax Amnesty, including what taxes are included and how to participate are available by calling 1-877-645-4108 or online at www.PhillyTaxAmnesty.com. Participants can apply and pay online or over the phone. Taxpayers can also visit the program Walk-in Site between the hours of 8:00 AM and 5:00 PM, Monday-Friday, located in Center City Philadelphia, at 1315 Walnut Street, Suite 1300 , where they can complete the Philadelphia Tax Amnesty application, make payments, and get assistance in filing back tax returns.