Overdue Taxes? CT Is Offering A 'Fresh Start'

In an effort to recoup millions in outstanding taxes from residents, the state has launched the CT Fresh Start program – "a voluntary compliance initiative available to both individuals and businesses that provides incentives to taxpayers who report and pay their outstanding, unreported tax liabilities to the state."

Gov. Dannel Malloy and Department of Revenue Services (DRS) Commissioner Kevin Sullivan announced the effort today, stressing that it was created by the bipartisan state budget Governor Malloy signed into law on October 31. The goal is to bring in $60 million in back taxes to the state by the end of FY18 and an additional $25 million by November 30, totaling $85 million.

"Not only will this program help individuals and businesses get back on track on their tax payments, but it will bring significant revenue back to our state, without raising taxes," said Malloy in a statement. "This revenue will be especially helpful during this time of budgetary constraint, under which our state has learned to do more with less. I strongly urge all filers that are behind on their payments to take this opportunity to make a fresh start."

Added Sullivan, "There are major differences between Connecticut and Washington when it comes to taxes. The Governor and the legislature created the Fresh Start program to work with taxpayers. Congress, on the other hand, is rushing into a false start that will increase federal taxes for middle income taxpayers, more so in Connecticut than any other state."

From the Malloy/Sullivan release:

Once a CT Fresh Start application is accepted, DRS will waive penalties and significantly reduce the interest (50 percent) owed. If requested before applying, DRS may agree to a limited "look back" period.

To participate, taxpayers must complete the online application on the DRS website or at www.makeafreshstartct.com. Questions on the CT Fresh Start program can be directed to DRS by calling 1-877-729-6691.

This is not a tax amnesty program like the state ran in 2013, because Fresh Start does not include accounts receivable and there is an emphasis on future compliance in the agreement for the next 3 years. CT Fresh Start works with individual and business taxpayers to get them back-on-track filing, reporting, and paying their tax obligations.

The sooner a taxpayer enters the CT Fresh Start program, the more they can potentially save on interest and possibly avoid an audit, which would disqualify them from participating.

Eligibility

In general, individuals and businesses are eligible to participate in CT Fresh Start if they failed to file a return, or failed to report the full amount of tax on a previously filed return for any tax return due on or before December 31, 2016.

CT Fresh Start may not be used to resolve outstanding tax liabilities for any tax type and period for which the taxpayer:

• Has received a bill;
• Is under audit;
• Is party to a closing agreement with DRS;
• Has made an offer of compromise that has been accepted by DRS;
• Has protested a determination of an audit; or
• Is a party to litigation against the Commissioner.

Even those who are ineligible to use CT Fresh Start to resolve certain tax liabilities may be eligible to resolve other tax liabilities through the program.

All taxes administered by DRS, except for taxes imposed under chapter 222 (IFTA), qualify for CT Fresh Start.

Examples of qualified Connecticut taxes include:

• Income tax;
• Business entity tax;
• Sales and Use tax;
• Withholding tax;
• Corporation business tax; and
• Gift tax.

Examples of taxes and fees not administered by DRS and not qualified for CT Fresh Start include:

• Local property taxes;
• Payroll taxes owed to the Connecticut Department of Labor;
• Taxes owed to the federal government; and
• Fees imposed by the Secretary of the State.

Visit www.makeafreshstartct.com for additional information.

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