YOUNGSTOWN City considers income tax amnesty

The city would waive all penalties and interest on income taxes owed.
By ROGER G. SMITH
CITY HALL REPORTER
YOUNGSTOWN -- A chance to pay the city your back taxes without repercussion comes around every couple of decades.
Now might be one of those few times.
Details haven't been finalized, but the city expects to offer an income tax amnesty starting before year's end. The city would waive all penalties and interest on income taxes owed.
Scofflaws would have three months or so to "get honest and right," as Finance Director Barbara Burtner puts it.
Amnesty could be extended, but Burtner wouldn't suggest waiting, since investigators will vigorously seek out violators once the program ends.
"We'll be a lot more aggressive about finding people who aren't filing," she said. "It behooves them to take advantage when they can get the penalties and interest waived."
Goals: Tax amnesties have two goals:
* Maximize revenues by collecting back taxes.
*Get people who haven't been paying in the past on the tax rolls for the future.
"Hopefully we'll come up with a few new taxpayers," Burtner said.
Typically, she follows Internal Revenue Service policy and waives penalties on back taxes for good cause, but never the interest. The city charges 1 percent interest per month on back taxes, or 12 percent annually.
A 1984 city tax amnesty on $250,000 in delinquencies brought in $65,000, a good percentage, she said.
Burtner won't hazard even a guess at how much outstanding income tax is out there or how much could be collected. There is no way to gauge how many people fail to file tax returns or how many will turn themselves in, she said.
Burtner is seeking council's approval before instituting the amnesty. Council's finance committee supports the concept, she said.
She also is asking council members to change the fine for not filing an income tax return. The fine would rise to $100 per return not filed, up from just $5 per missing return now.
That penalty ought to get people's attention, she said.
The city has been thinking about offering amnesty for several years. A slowed economy, reorganization in the finance department and the state's own amnesty program all make this the right time, Burtner said.
State program: Ohio is offering to drop half the interest for people who owe a variety of taxes -- unbeknown to the state taxation department -- if they pay the balance between Oct. 15 and Jan. 15.
The state expects collections will total about $17 million. An additional $5 million is expected each year from newly enrolled taxpayers.
rgsmith@vindy.com