The Department of Revenue Services collected at least $95 million from approximately 10,000 people in its 2002 tax amnesty program, according to preliminary results released by Gavin on Tuesday. Final numbers are expected by the end of the week, and the department predicts the total will rise over the $100 million mark.
“We’re ecstatic,” said tax commissioner Gene Gavin. “This is the most successful program we’ve ever had.”
The three-month program that ended Monday gave delinquents the chance to pay back taxes without fear of penalty or prosecution, and granted them a 25-percent break in any interest owed.
The program collected as much as $23 million from one delinquent taxpayer, and as little as 5 cents from another, Gavin said. He did not release the names of either taxpayer.
The program has been tried twice before in Connecticut, once in 1990 and once in 1995. While both raked in millions of dollars, neither came close to the success of this year’s drive.
The state had set a goal of $24 million when the program started in November.
The results are good news for the state, which faces a $500 million budget deficit this fiscal year. Money from the tax amnesty program will be sent to the state’s general fund.
“The money raised through this unusually successful program will allow us to make a fair-sized dent in the state budget deficit,” Gov. John G. Rowland said.
The program easily paid for itself during its three-month run. The General Assembly allotted the DRS $2 million — $500,000 of which will be returned because it was not used — for television, radio and newspaper advertising.
The department even sported a billboard on its Hartford building that shouted “Either Way, You Will Pay” at commuters on Interstate 84.
Connecticut’s program included all taxes administered by DRS except for an international gasoline tax. It applied to any taxable period ending on or before March 31, 2002, and excluded federal and local property taxes.
Individuals and businesses who took advantage of the program won’t be reported to the Internal Revenue Service, but anyone under audit, under criminal investigation or involved in litigation with DRS wasn’t eligible to participate.
Some states offer incentives during time periods of 90 days or more that allow late taxpayers to pay up without having to tack on the interest late payments have racked up.
That’s not an option for Connecticut, Gavin said.
“What we did in Connecticut was a proper thing to do, a generous thing to do,” Gavin said. “We didn’t give away the store to the bad guys.”
With the amnesty period over, a newly enhanced computer system that cost the state millions of dollars will help track leftover delinquents, Gavin said. The department does not have an estimate of how many Connecticut residents still owe taxes. The department is also working with people who came forward during the amnesty period to try and negotiate a payment plan, he said.
“Either way, you will pay,” Gavin said. “Time is on our side.”