Amnesty offered on late taxes

In forgiving, towns hope for a win-win

By Johanna Seltz
Globe Correspondent / March 27, 2011

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Weymouth officials are banking on an offer of amnesty for tax delinquents to bring some big bucks into the town’s coffers.

They will forgive half the interest owed on property in tax title — property so much in arrears that the town has legally attached it. The program started Jan. 1 and expires June 30.

“It’s a great collection tool,’’ said assistant tax collector Rosemarie Driscoll. “It does help people who owe a lot of money. There are properties with $30,000 [owed] in interest, so that’s a $15,000 savings. It’s a big deal.’’

Sylvia Dion, a certified public accountant who blogs about state and local taxes, said tax amnesties “are generally a win-win for both the government and the taxpayer.’’

Dedham, for example, collected nearly $300,000 in its amnesty program, which ended Feb. 28.

Dion said that in the past two years, more than half the states, including Massachusetts — plus the city of Philadelphia and the District of Columbia — have implemented some type of amnesty program in attempts to raise much-needed revenue quickly. Massachusetts collected $32.6 million in outstanding liabilities from April through June 2010, she said.

Since the Weymouth amnesty program started, Driscoll said, she has collected about $40,000 and she anticipates “quite a bit more.’’

“I’m hoping to get at least $100,000,’’ she said.

The potential is far higher; Weymouth has about $3.8 million in delinquent property taxes, she said. The town collected about $75.1 million in property taxes last fiscal year.

State officials say they won’t know until later this year how many other communities are helping delinquent property taxpayers and bulking up collections. The Legislature, acting on a recommendation from its Special Commission on Municipal Relief, voted last year to allow temporary amnesties this fiscal year, which ends June 30, 2011.

The commission noted that the state had a similar temporary program for state taxpayer relief, and said “municipal governments should also be able to conduct a temporary tax amnesty program, since financial difficulties due to the current crisis make tax payments difficult for citizens.’’

The results of the amnesty programs must be reported to the state Department of Revenue, the law said.

Department of Revenue spokesman Robert Bliss said the state wouldn’t know how many communities participated, or how much money they collected, until the fiscal year ends on June 30. “Typically [reports] come in several months later,’’ he said.

One community that will be reporting success with the program is Dedham, which already has collected close to $300,000 in back taxes, according to treasurer-collector Robin A. Reyes.

The Dedham amnesty program took place between Jan. 1 and Feb. 28, and waived interest on any delinquent property tax bill, not just those in tax title.

Reyes said the amnesty allowed taxpayers to save a considerable amount of cash, since interest rates on past due taxes are 14 percent and go up to 16 percent if the town puts a lien on the property. The rates are set by the state, he said.

Reyes said he had predicted the amnesty would bring in around $250,000; the town collected $289,773 in outstanding taxes, he said.

Only a fraction of the payments — about $44,000 — came from people whose property had been attached by the town.

“The entire delinquency had to be paid at once, and that kept some people from redeeming their tax titles,’’ Reyes said. “I guess some people just couldn’t get the money together in time.’’

The town, which lists $71.3 million in property tax revenue in the fiscal 2011 budget, still has about $3 million in outstanding tax bills, Reyes said.

“I think it was a success,’’ he said of the amnesty. “The paperwork was easy. We would probably do it again.’’

The last time Dedham offered a tax amnesty was in 2004, when in one month the town took in about $600,000, he said.

Johanna Seltz can be reached at