An attempt to add Maryland to a growing list of states that grant temporary amnesty to citizens who haven't paid their taxes has won the support of the governor and comptroller while drawing the ire of the attorney general.
In a letter sent today to Senate Budget and Taxation Committee Chairman Laurence Levitan, Attorney General Stephen H. Sachs said the amnesty bill now awaiting committee approval might "suggest that the state has capitulated to those who are less than honest in dealing with the government."
The bill's sponsor, Sen. Decatur W. Trotter (D-Prince George's), said that money collected through the one-time, 60-day amnesty program could help cushion the drain on state dollars that has resulted from the ongoing savings and loan crisis.
The legislation, if passed, would go into effect for two months beginning in September and would allow delinquent taxpayers to pay off back taxes -- plus accrued interest -- without being prosecuted. Similar legislation was introduced this week in the D.C. City Council.
Amendments that would increase the penalty for tax evasion from a misdemeanor to a felony, Trotter said, should satisfy Sachs' objection that the bill is not tough enough on tax violators.
Sachs speculated today that the state could recover up to $8 million of the $82 million state officials estimate have been lost in unpaid taxes in 10 years.
George H. Spriggs Jr., director of the state Income Tax Division, said today that 18 states have tried amnesty programs and recovered millions of dollars that otherwise would have gone unretrieved.
Budget Chairman Levitan (D-Montgomery) said the full committee is expected to approve the amended proposal at its meeting Saturday, in spite of Sachs' objections. "They're not catching these guys anyway," he said. "And most of the time your tax cheats are not going to jail. We have nothing to lose by giving it a try."
Federal officials have estimated that amnesty bills could result in savings of $7 billion to $12 billion in a year when legislators are looking for ways to soften the impact of the Gramm-Rudman-Hollings deficit reduction law.
Maryland Comptroller Louis L. Goldstein, who previously opposed amnesty proposals, has never used special powers granted his office in 1984 that allow him to authorize amnesty programs. This year, he supports Trotter's plan, but suggests that the amnesty period be limited to 45 days and that the first $1 million in returns be used to hire new auditors for his office.
Sachs, however, maintained in his letter to Levitan that honest taxpayers will pay for the amnesty granted to others. "Forget the amnesty," he wrote. "Give us the resources for enforcement."