IRB offers delinquent taxpayers a 'last chance' to pay without penalties
Published: March 22, 2013
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ST. CROIX - The V.I. Internal Revenue Bureau is making moves to crack down on people who have failed to file their income tax returns.
But first, those who have not filed in past years get one last chance to do so.
"We're giving you one last chance to come in and say, "You know what? I may have overlooked this over the last number of years, but I'm ready to be in compliance," said Internal Revenue Bureau Director Claudette Watson-Anderson.
In a prepared statement released Thursday, the bureau announced "Operation Last Chance," an initiative that will give people who didn't file their income tax returns an opportunity to file and to settle up through May 17, without facing penalties.
"This is the last chance before I start prosecuting you for not filing a return," Watson-Anderson said. After May 17, the Internal Revenue Bureau intends to forward names of those who did not file their tax returns to the V.I. Attorney General's Office for prosecution.
The bureau intends to take "aggressive action" against non-filers, according to the statement. Actions include "the filing of Director's returns and levying on all available income sources to satisfy these debts. More importantly, a list of those taxpayers whom the Bureau have found to have attempted to evade or defeat taxes will be forwarded to the Attorney General's office for prosecution to the fullest extent of the law."
The move comes after the Internal Revenue Bureau conducted a preliminary analysis of income sources and turned up more than 300 people who have failed to file income tax returns, according to the statement.
The analysis was performed by checking different types of taxes from local data sources, Watson-Anderson said. For example, the analysis included checking to see if residents who filed Gross Receipts taxes also filed income tax returns and whether residents listed in 1099 data are filing an annual return, she said.
"It's more than 300 people," Watson-Anderson said. "Some of them have even filed extensions but never followed up with a return."
While filing an extension gives taxpayers additional time to file a return, it does not give them more time to pay, she said.
"I am expecting these people to file and pay any balance due," she said.
The estimated liability for unpaid taxes discovered during the analysis is between $8 million and $12 million, according to the Internal Revenue Bureau.
That figure takes into account that some taxpayers did not file a return for multiple years, Watson-Anderson said. It also includes taxpayers who have illegally filed with the U.S. Internal Revenue Service.
For those who do go in to the Internal Revenue Bureau to file their tax returns and pay up before May 17, penalties will be waived, although interest still must be paid, she said.
The point of waiving the penalties is just to make it more attractive for people to come in and get into compliance, she said.
Regarding why the Internal Revenue Bureau had not been actively pursuing non-filers all along, Watson-Anderson said it took some time to get the analysis together.
"It did take some time for us to look at the data and do the analysis," she said. "In times when things are going well in the economy, there's not as much emphasis on it because people are being compliant."
At this point, the government seriously needs the revenue, she said. The bureau intends to do more of these sorts of analyses in the future, according to Watson-Anderson.
"This will be expanded, I'm sure, to engulf more taxpayers than we already know of," she said.
The bureau hopes to see increased revenues as a result of the initiative, she said.
"We would love for taxpayers to take advantage of it, because what's the alternative? You will be prosecuted. It's always easier if you come to us," she said. "Don't forget, we already know who these taxpayers are."
To take advantage of the amnesty, taxpayers should put the words "Operation Last Chance" on the top of each return filed under the voluntary program.
Taxpayers with questions about Operation Last Chance can call 773-1040, ext. 4244.
- Contact Joy Blackburn at 714-9145 or email email@example.com.