The voluntary program in Connecticut is ending soon!
CT Fresh Start
The Department of Revenue Service (DRS) is offering a program called “CT Fresh Start” which provides incentives for individuals, businesses, trusts and estates who voluntarily come forward before November 30, 2018 to pay any unreported tax liabilities. Eligible returns were either never filed, or filed but the amount of tax was underreported for any tax year due on or before December 31, 2016. Many different tax filings are covered by the initiative, including income tax, business entity tax, sales and use tax, withholding tax, corporation business tax, and gift/estate tax.
Incentives for filing under this voluntary program are that no penalties will be imposed, there is a 50% reduction for interest, a limited look-back period (with certain restrictions), and no criminal prosecution for any application and taxes paid in good faith for the initiative. The DRS requires you to agree to timely file all your tax returns and pay the tax to the DRS for three years following the date of your application in order to remain compliant with the CT Fresh Start program.
You are not eligible to participate if you have already received a bill, are under audit, have an accepted offer of compromise, among others. However, you may be eligible to use CT Fresh Start to resolve other types of tax liabilities.
The limited look-back period is beneficial for businesses who have not previously registered in Connecticut for that tax. Under normal circumstances, the DRS has no limit to how far back they can look to assess taxes, penalties and interest for failure to file. For a business registering and filing for the first time, there will only be a three-year window and any liabilities from periods prior will be null and void. A limited look back does not apply to trust taxes (sales or withholding) that were collected but not remitted.
Unfortunately, not all taxes are covered under this relief program. Local property tax, payroll tax owed to the Department of Labor, federal taxes and Secretary of the State fees are not administered by the DRS and are therefore outside of the scope of the CT Fresh Start program.
How To Register
To register for CT Fresh Start, you just need to fill out an online application before November 30, 2018. There are no installment payments allowed and no refunds for overpayments. Also, the periods are still open for audit, so it is important to get everything done right! This is a great opportunity to get on track and back in good standing.
If you believe you can benefit from this opportunity and would like to learn more, please contact us for more information at 203-489-0612.