State’s tax amnesty program scheduled to begin Nov. 1

AUGUSTA — State government will go to the airwaves after the Nov. 6 election to remind more than 50,000 taxpayers that they can pay their back debts without penalty — until the end of the year.

The one-time initiative is expected to generate at least $15 million from taxpayers who collectively owe more than $40 million in debts that the state Taxation Bureau has identified.

Also, “we are hoping to get money that we don’t know anything about as well,” state tax assessor John LaFaver said.

Although the tax amnesty program opens Nov. 1, the publicity campaign will be deferred at least a week so the state can avoid the higher prices and crowded advertising schedules resulting from the busy political campaign season, said LaFaver.

“We don’t want to compete” with the candidates, LaFaver said.

Besides, experience in other states has shown that the tax dodgers who benefit from amnesty programs generally do not pay up until close to the deadline — Dec. 31 in Maine’s case, LaFaver said.

“You don’t really bring the money in until the last week, week and a half, of the campaign,” he said.

A $200,000 contract for the publicity campaign was awarded last week to the Warren Marketing Group in Portland, one of 12 Maine firms that submitted bids, and LaFaver said the choice of a slogan and other aspects of the campaign have yet to be determined.

The amnesty program is one of the major and more controversial components of the package Gov. John R. McKernan and the Democratic majority in the Legislature agreed upon earlier this year to erase a potential $210 million deficit through mid-1991.

Letters to people who owe back taxes will be mailed out between mid-October and mid-November, advising them how much they owe and how much they could save by paying under the amnesty program, LaFaver said.

Those who are willing to pay up between Nov. 1 and the end of the year will be forgiven all penalties and half of the interest on their debts.

Penalties for failure to file returns and failure to pay taxes each are set at 5 percent per month, up to a maximum of 25 percent in each case. Interest on unpaid taxes is 12 percent a year, LaFaver said.

“It’s important for taxpayers to know that amnesty is a one-time-only opportunity which, if ignored, can have very unpleasant results,” LaFaver said in a statement issued last week.

Those who refuse to pay during the two-month amnesty period will face stiff new penalties, including the potential loss of state licenses and the seizure of real estate and other property.

Further, lawmakers approved the addition of tax-enforcement officials and auditors to enhance enforcement of the tax laws, as well as more prosecutors in the attorney general’s office to handle tax-evasion cases.

The program does not cover taxes due on or after April 17, this year’s income-tax filing deadline.