For the first time in 5 years, Ohio may initiate a Tax Amnesty program for taxpayers to resolve delinquent tax obligations. Under a bill, signed by Governor DeWine in January 2023, the Director of Budget and Management can determine that a tax amnesty program would be necessary in order for the State to meet certain revenue obligations for fiscal year 2023. If the Director makes this determination, then a two-month tax amnesty period will commence before November 1, 2023.

Ohio Tax Amnesty Program

The taxes that would be covered under the amnesty include but are not limited to:

• Income Tax
• State Sales and Use Tax
• Commercial Activity Tax
• County Sales and Use Tax

Taxpayers who participate in the amnesty program and pay all delinquent tax obligations would receive a waiver of all penalties and interest. In addition, taxpayers who participate in the program would be immune from any criminal prosecution or civil action for the delinquent tax obligations.

It is important to note that this amnesty program would only cover taxes that were unreported or underreported. Taxpayers who are currently under audit or have received a notice of assessment from the State would not qualify for this amnesty program. Individuals not eligible for the amnesty program may still consider the use of a voluntary disclosure arrangement to resolve outstanding tax issues.

Ohio Voluntary Disclosure Program

Under the Ohio voluntary disclosure program, a taxpayer can voluntarily come forward to report any outstanding tax obligations including individual income, commercial activity, sales and use, and other related taxes. Under the program, the state will waive any associated penalties for the unreported period (currently 3 years), resulting in the taxpayer only being responsible for the underlining tax obligation and interest. In order to qualify, the taxpayer must not be under review by the Department of Taxation, have any outstanding bill or assessment, and must remit all amounts owed, if the State agrees to the voluntary disclosure.

Taxpayers Should Weigh Their Options

Due to the uncertainty related to Amnesty program, taxpayers should carefully weigh whether to wait to pursue an amnesty claim in order to receive a waiver of penalties and interest or solely pursue a voluntary disclosure instead.