The Morning Journal (Lorain, OH)
Income tax amnesty coming
Lorain program will run Feb. 1 through March 29
Lorain taxpayers who owe will have a chance to pay without penalty when the city holds its first income tax amnesty this year.
The amnesty period is a new initiative to collect delinquent income taxes, said city Treasurer Terri Soto.
The city collects about $20 million a year in income taxes.
The amnesty initiative is to ensure that every taxpayer is aware of and contributing to the funding of city services that benefit everyone, such as police, firefighters and street maintenance, Soto said.
Lorain City Council approved the tax amnesty plan on Jan. 7.
The tax penalty amnesty will be Feb. 1 to March 29. For those who need to pay, it will be a chance to “wipe the slate clean” and encourage future compliance, Soto said.
As the new year begins, people will begin thinking about filing their income taxes for the year past, Soto said.
“The reason why I picked now is because everyone’s going to get ready to start filing 2018, so I figured, they’re going to start getting their refund, and before they start spending it elsewhere, they need to do their taxpayer responsibility and pay their local taxes,” Soto said.
The plan is part of a twopart approach to boost city income taxes and comply with the law.
The first phase is voluntary so taxpayers can file returns and pay without penalties; pay outstanding tax balances without penalties; or pay a balance of outstanding penalties at a reduced amount.
Soto estimated about 10,000 notices will go out to people who may owe income tax to the city.
The amnesty effort will focus on people who may owe for 2015, 2016 and 2017, although the city can go back to 2012 for collection purposes, she said.
The second phase will be a more thorough identification of noncompliant taxpayers, Soto said.
The city Income Tax Division will access federal tax records through an agreement with the Central Collection Agency of Cleveland.
“This increases the city of Lorain’s ability to identify taxpayers who did not file and/or pay the proper city income tax,” Soto said.
Delinquent taxpayers identified after the income tax amnesty will be prosecuted and held responsible for all penalties and interest.
Soto credited the work of city Auditor Karen Shawver. She began considering an income tax amnesty program during her term as city treasurer, but was unable to arrange it before becoming city auditor.
The plan generally earned praise from Council, with Councilwoman-atLarge Mary Springowski, Councilman Joshua Thornsberry and Councilman-atLarge Mitch Fallis commenting.
“When a public official creates a new initiative it takes thoughts, it takes analysis, it strategy and it takes execution and those four items require much effort and energy that a public official normally doesn’t give in their job,” Fallis said. “So I commend Terri Soto for providing the extra effort and energy to bring tax dollars through the tax amnesty program.”
It was unclear exactly how much income tax the city could collect.
However, Soto said an August 2018 session for taxpayers who did not file their 2017 tax returns on time had a day with 892 people waiting for tax help at the office.
The city collected $253,000 in taxes, late fees, interest and penalties in a 12-day period, she said.
Soto said she consulted with her counterparts in cities such as Dayton, Cincinnati, Columbus and Lakewood, which had tax amnesty programs in the past. Cities generally have such programs about once every 10 years, she said.
The Income Tax Division will not hire additional staff for the tax amnesty program, Soto said.