Personal income tax: corporation tax: sales and use taxes: California Tax Amnesty and Revenue Recovery Act.
If enacted, AB 879 could have significant implications for state laws related to personal income tax, corporation tax, and sales and use taxes. By implementing a tax amnesty, businesses and individuals who have previously struggled to meet their tax obligations may be enabled to resolve their tax debts without incurring additional financial penalties. The structure of the program aims to encourage compliance among taxpayers while alleviating some of the financial burden created during the pandemic by allowing eligible individuals to apply under the penalty of perjury, thus treating the application process more seriously.
Assembly Bill 879, also referred to as the California Tax Amnesty and Revenue Recovery Act, aims to create a tax amnesty program targeted to assist taxpayers facing challenges in meeting their tax liabilities during the economic fallout from the COVID-19 pandemic. The bill stipulates that the California Department of Tax and Fee Administration and the Franchise Tax Board will administer this program over specified periods in 2022, allowing taxpayers to settle overdue tax liabilities without incurring penalties. This initiative is a critical effort to bring non-compliant taxpayers back into the fold, particularly as many businesses struggle to recover financially after closures attributed to the pandemic.
The sentiment surrounding AB 879 is generally favorable among supporters who view it as a necessary intervention to aid taxpayers in distress. Proponents emphasize the importance of providing relief to individuals and businesses that have faced unprecedented economic challenges. However, there are also concerns raised regarding the potential risks of encouraging non-compliance among taxpayers who may perceive the amnesty as a loophole to avoid penalties. Critics argue that while the intent is commendable, it may inadvertently lead to a culture of tax avoidance if not managed appropriately.
One notable point of contention involves the requirement that applicants to the program file under penalty of perjury, which expands the definition of perjury in the context of tax compliance. While supporters argue that this measure will ensure accountability and discourage fraudulent applications, critics express concern that it might create additional burdens for taxpayers who are already stressed by financial difficulties. Furthermore, the bill includes provisions that exempt local agencies and school districts from reimbursement for related costs, potentially leading to debates about fiscal responsibilities and funding implications at the local level.