September and October will be "come forward and come clean" months for Maryland citizens and corporations who owe the state back taxes.
Hoping to collect millions of dollars from scofflaws, Maryland is undertaking a "carrot and stick" tax amnesty program.
The carrot will be extended for 61 days beginning Sept. 1, when tax evaders may catch up on their back taxes without paying a penalty or facing prosecution.
The stick will be applied starting Nov. 1. After that date, penalties, fines and maximum jail sentences will increase sharply. The comptroller's office also will be hiring employes to step up tax collection efforts.
Tax amnesty programs have had varied results in other states, said Marvin Bond, a spokesman for state Comptroller Louis L. Goldstein.
Predictions of how much money Maryland will collect have been equally varied, but the legislature budgeted $20 million in revenue from the program.
"We feel we will be doing well if we get that," Bond said.
A publicity effort will begin Aug. 19, when the comptroller's office will launch a $375,000 advertising campaign to make Marylanders aware of the amnesty program and how it works.
Taxpayers have to fill out a short form and send it with their back taxes, including interest, to the comptroller before Oct. 31. Forms will be available at displays in about 1,200 banks and 80 Giant supermarkets. Forms and information on how much a taxpayer owes can be obtained by calling the comptroller's office, 1-800-MD TAXES.
For individuals, the program covers state and local income taxes and the boat excise tax. For corporations, it covers employer withholding taxes, corporate income taxes, sales taxes and amusement and admissions taxes.
The program covers all taxes due before Dec. 31, 1986. However, the tougher penalties will apply to all unpaid taxes.
Maryland adds a 10 percent civil penalty for any taxes that are not paid on time. After Nov. 1, the penalty will increase to 25 percent. Interest payments will not change.
The maximum fine for tax evasion will increase from $1,000 to $5,000, and the maximum jail sentence will increase from one year to five years.