House Bill 8 (HB 8) revised the Kentucky Tax Amnesty Act and established a tax amnesty program for 2023 in the event the Kentucky Department of Revenue (KDOR) could not implement one in 2022. However, with two and a half weeks remaining before the statutorily-mandated tax amnesty program is to begin, legislative critics have argued that KDOR has yet to make preparations for the tax amnesty program and ignored HB 8’s directive. The legislative critics note that KDOR could have contracted out the administration of the tax amnesty program and argue that KDOR’s failure to either contract out or implement the tax amnesty program itself is a major oversight by KDOR.
In response, Governor Beshear’s team argues the oversight is due to the legislature’s failure to heed Beshear’s warning and provide KDOR with the required funding to implement or oversee the tax amnesty program. When Governor Beshear vetoed HB 8 in April 2022, he warned the legislature of KDOR’s lack of resources and called the tax amnesty program “another unfunded mandate.” In a letter dated June 8, 2022, Beshear reiterated KDOR’s lack of resources required to fund the tax amnesty program when he stated that KDOR would request a proposal, but would have to provide a disclaimer that KDOR could not pay the vendor. Beshear also offered another warning that KDOR needed funding to implement the 2023 tax amnesty program.
This back and forth between the executive branch and legislative branch has led to taxpayer confusion regarding whether and when tax amnesty may be available. Taxpayers should consider options for resolving amounts that may be eligible for amnesty.
August 25, 2023