Tuesday, November 15, 2005

Amnesty Data Calculation: The State's Own Albatross

Tax Amnesty ended today, and everyone wants to know the results. Masson asks for relevant statistics such as the total revenue, the money lost by means of forgiven penalties, and the unpaid amnesty debt that will accrue. Based on my research of tax amnesty in other states and the language in the Indiana Amnesty Act, here is what to expect in the way of post-amnesty statistics (Yes, I am sort of cutting and pasting from the comment I posted on Masson’s Blog earlier):

--I expect it to take up to three months for the DOR to calculate preliminary estimates of the total revenue that amnesty brought in and publish a report with all the statistics. Some states have taken over a year to complete post-amnesty reports, and some never do. With the influx of payments at the end of the amnesty period, it normally takes quite a while after the amnesty deadline to process all of the payments.

--I would not expect there to be any publication of the amount of lost penalties and fees - it is not only very difficult to calculate, but it is casts a negative light on amnesty. The main purpose of a post-amnesty report is to make revenue departments and politicians look like fiscal heroes.

--As far as the uncollected monies from taxpayers who arranged a payment plan, nobody will know those numbers until June 15, 2006, when all payment plan debts must be paid in full. I predict that if the information is made public, it will only be available to those who are savvy enough with the DOR’s data website to piece it together by hand.

I certainly hope that I am proven wrong and that amnesty data is made available quickly and completely. But experiences in other states indicate that after an amnesty, the revenue number is broadcast loudly and publicly while the hidden story of lost fees and decreasing future tax compliance is swept away even faster than John Q.'s tax debt was.


Blogger Doug said...

There is a story in the Evansville Courier Press this morning. Some positioning by Rs and Ds trying to make the outcome appear more or less favorable, respectively. The main thing of substance was that ordinary back collections were down about $12 million, presumably an effect of the tax amnesty. So, Rep. Bauer thinks that at least that $12 million should be deducted when assessing the yield of the amnesty since it's money "we would have gotten anyway."

9:03 AM  

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