Alabama Tax Debt Relief

In recent years, the operating capital for Alabama has continued to fall, leaving the state seriously short. With one of the country’s worst debt ratios, the Alabama Department of Revenue has grown increasingly aggressive in dealing with delinquent taxpayers. Interest and penalties on back taxes are generally pursued to the fullest extent of the law in Alabama, with little leniency.

However, On January 15, 2009, Governor Bob Riley and Alabama Revenue Commissioner Tim Russell jointly announced "Operation Clean Slate," a temporary amnesty program that waived penalties and criminal prosecution for delinquent Alabama taxpayers who voluntarily filed returns and paid their back taxes. The amnesty period began on February 1 and extended through May 15 of 2009. During that time, anyone who had not filed a required Alabama individual or corporate income tax return, or a Business Privilege tax return, could have filed the return and paid the required tax without being held liable for any penalties or any criminal prosecution for failure to file.

The benefits of this program were not available to taxpayers who had already been contacted by the Department of Revenue about their unpaid taxes. Now the state plans to bring online a new $26 million computer system, which will "increase the Department's ability to identify those who are not paying taxes or are under-reporting the taxes they owe."

Governor Riley warns that those who are not paying what they owe are breaking the law, and "The likelihood that they will get caught is about to increase tremendously."

If you live in Alabama and are facing tax debt, your window of opportunity to decrease the amount of money you owe is closing. Your ability to work out a way to pay off your tax debt is only going to become more difficult. For a free tax relief consultation with a tax professional serving Alabama residents and business taxpayers, please click here.