Last summer Justin Bieber asked us “is it too late now to say sorry?” Well Justin, the answer might just depend on if you’re a taxpayer in Vermont or California.
In Vermont, forgiveness is in the air. Income tax deficiencies for the 2015 taxable year, arising from errors in the calculation of itemized deductions in certain commercial tax preparation software, will not be collected, according to a July 5 Press Release from the Vermont Department of Taxation.
This means that taxpayers who underpaid their 2015 income taxes as a result of this error will have their deficiencies forgiven. Also, taxpayers who have already made a payment to address the deficiency will receive a refund, according to the release.
Vermont was able to forgive these outstanding tax deficiencies because of the monetary contributions from Intuit and H&R Block, two vendors of commercial tax preparation software. The underlying error that lead to the deficiencies has since been corrected, the release also states.
In California, it is the Franchise Tax Board (FTB) rather than the taxpayer who is asking for forgiveness. In mid-June the FTB apologized to 30,000 taxpayers for making errors in their tax assessment, as reported by Laura Mahoney in Bloomberg BNA’s Weekly State Tax Report. The error was a result of receiving late withholding information from employers and new upgrades automating the state’s assessment system, the article states.
However, taxpayers in California may be quick to forgive the FTB. For many, California’s apology is also coming with some money. Nearly 90 percent of the taxpayers who were contacted by the state with an incorrect tax adjustment will in fact be receiving a refund, the article added.
With the majority of affected taxpayers in Vermont and California coming out ahead of the game, it looks like it might never too late to say sorry. Someone tell Justin Bieber.
*Continue the discussion on Bloomberg BNA's State Tax Group on LinkedIn: Should taxpayers be held responsible for technological errors resulting in tax deficiencies?
For more information about tax credits, check out Bloomberg BNA’s Individual Income Tax Navigator by signing up for a free trial of the Bloomberg BNA Premier State Tax Library today.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)