FRANKFORT, Ky (WHAS11) -- It's an important message for the estimated 170,000 people and businesses behind on their Kentucky taxes.
Pay up now and catch a break, or pay up later and pay the price.
Authorized by the General Assembly, a 61 day tax amnesty program began on Monday with a capitol news conference and a television ad campaign promising "good news" for delinquent debtors and Kentucky taxpayers.
In a weak economy and a tight budget, the state is banking on about $56 million in revenue during the amnesty window. A 2002 tax amnesty program raised about $41 million.
"This will go into the General Fund of the Commonwealth," explained Gov. Steve Beshear (D). It is been budgeted already, an estimated amount has been and balancing our budget, and then we will utilize it as we utilize other General Fund money to educate our kids, to provide public safety, to create jobs to provide health care for our people."
The Kentucky General Assembly approved the amnesty offer (PDF) earlier this year.
Until November 30, the amnesty program allows delinquent debtors to pay taxes accrued between December 1, 2001 and October 1, 2011 without penalties or fees and at only half the interest charges.
It's a trade-off the state says is worth the payoff.
"There's a cost associated with collection efforts," said Sec. Lori Flanery of the Finance and Administration Cabinet, "and so we believe that the benefit of actually receiving the money now may outweigh that cost and ceratinly the uncertainty of being able to collect on it."
A television ad reaches out to people with a tax bill hanging over their heads, or their consciences, that amnesty is an opportunity for a "fresh start."
Yet, it's a limited time offer. As much as Amnesty offers incentives to pay up immediately, amnesty's expiration on November 30th offers a threat - all penalties and fees will be reinstated.
"Also, full interest rates would accrue, would basically pop up to what it was before the amnesty period started," Flanery said. "And in addition to that, there are enhanced collection fees of 25 to 50 percent just depending on the taxpayer situation."
Though tax amnesty is described by the state as a "rare" opportunity, this is the third such opportunity in the last 25 years, after similar tax amnesty periods in 1988 and 2002.
Beshear was asked if regular amnesty periods discourage taxpayers from paying their taxes on time.
"In most tax cases, you go to court and you collect long before ten years is out," Beshear replied. "So, no this shouldn't be sending a bad signal from the Commonwealth or a good signal that 'I don't have to pay my taxes.' We will be coming after delinquent taxpayers hard and heavy if they don't pay up and we've been doing that over the last ten years."
The average delinquent taxpayer owes Kentucky about $5000 and the average business owes about $2000, according to the governor's office.
"This is just a special window where we can create some really quick revenue for the commonwealth that will help enable us to continue educating our kids and doing those things in these tough financial times that we need to do," Beshear said.
Those who owe back taxes will get notifications in the mail telling them the amount they owe. Those who ignore the offer will face more severe penalties.
The toll-free hotline is 855-KYTAXES (855-598-2937) or go to www.amnesty.ky.gov for more information.