Cover Story: NC tax amnesty to boost revenue

By Jeff Atkinson - bio l email

CHARLOTTE, NC (WBTV) - Amnesty for those who jilt the tax man.  North Carolina lawmakers say pay us what's past due and we'll forget about the rest.

They say cheaters never prosper.  Until now.  Tax cheats - people who thumb their noses at the government - could be in line for a reprieve.

Some North Carolina lawmakers say forgive and forget.  No punishment for this chronic cheaters as long as they pay what's past due.

To some it seems counterintuitive right now.  Chronic tax cheats (when they do pay up) bring in more money - there are fines and interest to pay.  The trouble is scofflaws aren't paying.

You check out a book, take it home to read, time passes and you forget to return it.  If you luck out sometimes the library will wipe out the fines.

What if you could get that - amnesty - at the tax office?

"I would be all for that. I think that's something that would be good."

We're talking about $1 billion in back taxes - money that so far the state has not been able to collect.

Right now for those scofflaws there's no incentive to pay up.  Not only do they owe the taxes, but there's interest, fines and in some cases criminal penalties.

At a time the state's facing a $2 billion deficit and considering laying off even more teachers, Republicans in the North Carolina House are considering  offering tax cheats an olive branch - amnesty.

Starting in July for one year, here's the deal:  Pay your back taxes and half the interest and the slate's wiped clean.

"I just think that would help because as we can see Charlotte and surrounding areas are hurting from not having the tax sources."

"I think it has its incentives because if they don't have to pay those penalties they'll better be able to pay there taxes."


There are estimates that North Carolina could bring $200 million.  It's been effective elsewhere, said Dr. Benjamin Russo, an economics professor at UNC Charlotte.

"States have tended to collect a heck of a lot more than they anticipate," he said.

  • New Jersey brought in $725 million.  The state was anticipating $190 million.
  • Massachusetts collected $33 million in three months.
  • Even cities - Cincinnati banked more than $1 million in a two-month amnesty that just ended.

Russo, an expert on fiscal policy, says there are two schools of thought.  One is it encourages people to come clean.  Secondly, they may come to expect it, just like amnesty for overdue library books.

"People tend to forget these things, these obligations and so you give them a chance to make up for that then you collect more books, you collect more revenue," he said.

People we talked to can see both sides but if forced to decide.

"Just because I have all these grandchildren I'd come down on the side of amnesty only because I don't want to see my grandchildren watch me get carted off.. you know?"

A Republican member in the House introduced the amnesty bill.  He says North Carolina shouldn't impose penalties at a time when many people can't find a job.  Those who owe back taxes are individuals and businesses.

Has the state done this before?  North Carolina offered an amnesty program 22 years ago and collected almost $38 million. South Carolina has offered amnesty a couple times in the last 25 years.

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