The City of Philadelphia is giving tax scofflaws a once in-a-quarter-century chance to make good on their debts at a bargain price with a 54-day tax amnesty that began Monday.
Until June 25, the city will waive all penalties, attorney fees and half the interest due on debts incurred between 1986 and 2009.
The amnesty covers all major city taxes — including wage, property and business privilege — and is open to almost anyone who lives, works or does business in Philadelphia. Only those who participated in earlier amnesties or are the subject of a criminal tax investigation are ineligible.
“We want to give folks a second chance to get right with the law and make sure they’re paying their fair share like everyone else,” Mayor Nutter said at a morning event outside City Hall promoting the amnesty, the city’s first since 1986.
Nutter also wants the money. The city faces a deficit next year of up to $150 million.
Nutter hopes to collect about $40 million through the amnesty, with $10-$13 million set aside for the costs of marketing the program and paying an outside collection agency to run the campaign.
Even if the city hits that target, however, it would collect just a small fraction of the total deliquent taxes owed. As of February, taxpayers owed the city and School District of Philadelphia a combined $943 million. Of that, $585 million is principal, while the rest is penalties and interest.
Though they acknowledge that the figures are technically accurate, city officials say such numbers give a false impression. Much of that debt, they contend, is not realistically collectible. Some of it is decades old, and is owed by dead individuals without estates or defunct companies.
Nonetheless, the Nutter administration has acknowledged the city needs to strengthen its tax collection efforts, and officials say they have already made many improvements.
Mayor Nutter cited one of those new steps yesterday: additional penalties of up to $5,000 for delinquents who fail to use the amnesty to pay up.
Nutter has also made a point of publicly shaming top delinquents from time-to-time by releasing their names to the press.
Last year, he had a memorable encounter with a tax-delinquent attorney in Center City who objected to the fact that Nutter had called a press conference outside the lawyer’s office to highlight stepped-up tax collection efforts.
“We are serious about this measure and we will collect every dime that is legitimately owed to the City of Philadelphia,” Nutter said Monday.
The city is one of many cash-strapped governments to turn to tax amnesties recently.
The Commonwealth of Pennsylvania is offering a tax amnesty through June 18, with terms similar to those of offered by Philadelphia. And last year New Jersey collected $725 million through an amnesty.
Delinquent taxpayers who wish to participate in Philadelphia’s program can visit www.PhillyTaxAmnesty.com or call 877-323-4124.