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CNMI Department of Finance - Revenue & Taxation

2013 Tax Amnesty PL18-29

The Division of Revenue and Taxation, Department of Finance announces that Governor Eloy S. Inos signed into law a new amnesty program pursuant to Public Law 18-29

Under the amnesty program, taxpayers may request for a waiver of penalty and interest imposed on late-filed returns, under-reported income, and delinquent tax liabilities.  The program covers tax returns and taxes prior to tax year 2013.  A special return and a request for waiver form must be filed to participate in the program.

If you are eligible to participate in the amnesty program (see Q1 below), you are encouraged to take advantage of the penalty and interest relief afforded under Public Law 18-29.  The program will expire on January 2, 2014.  The special return and request for waiver form is now available at the Division of Revenue. To avoid the inconvenience of last minute filing, you are urged to visit the Division of Revenue and Taxation and file early.


Applicable forms: Request for Waiver

Note: Use the applicable tax form for your filing in cases of original or amended filings. Bring your completed form to the Division of Revenue and Taxation for validation and certification as a “Special Return”.


FAQ

The following questions and answers (Q&A) will assist you in understanding the amnesty program under Public Law 18-29:

Q1 – Who is eligible to participate in the program?

A1 – The tax amnesty program is restricted to people who have not previously "received tax amnesty."

"Received tax amnesty" means that the taxpayer applied for and completed all terms associated with a previous tax amnesty under Public Laws 12-51 and/or 14-28).  .  For more information about eligibility, please visit the Division of Revenue and Taxation.

Q2 – What taxes are covered under the amnesty program?

A2 – Taxes covered under the program are:

Q3 - If a taxpayer hasn’t filed a return what are the penalties that can be waived?

A3- There are two penalties that apply to unfiled or late-filed returns. 

Q4 – Can interest charges be waived?

A4 – Yes. Interest will be waived on the amount of the tax principle paid within the amnesty period.  If the taxpayer pays all of the tax principle balance within the amnesty period, all interest charges will be waived.  If there is a remaining tax principle balance after the amnesty period, the interest attributable to the remaining tax principle balance will NOT be waived.  In addition, interest will continue to accrue on the principle balance during the installment agreement period.   

Q5 – If a taxpayer has under-reported income and wants to correct it by an amended return, can the taxpayer participate in the program, and what penalties and interest will be waived?

A5 – Yes. A penalty for failure to pay tax (additional tax) on the corrected (amended) return will normally apply. A penalty of ½ of one percent per month is imposed based on the additional tax principle amount on the amended return.  If an amended return is filed to correct the under-reported income within the amnesty period, the failure to pay penalty will be waived.  However, payment of the tax or an arrangement to pay the tax through an installment agreement will be required.  As to waiver of interest, see answer to Q4.  

Q6 – If a taxpayer had already paid all the taxes (principle) but has not paid the penalty and interest, can the penalty and interest be waived?

A6 – Yes. The penalty and interest will be waived provided that compliance requirements are met (See “Compliance Requirement” below).

Q7 – Can penalties and interest for income taxes (NMTIT) be waived?

A7 – Penalties can be waived under the NMTIT if the taxpayer has reasonable cause to warrant a waiver. Reasonable cause is generally a situation beyond the control of the taxpayer and it involves a facts and circumstances review and will require substantiation.  The review is done on a case-by-case basis.  NMTIT interest cannot be waived.

Q8 – Can a taxpayer use claims that they have against the Commonwealth of the Northern Mariana Islands as amounts to be used to satisfy tax liabilities or payments required under the tax amnesty program?

A8 – No.  The issue involves multiple layers of legal obligations that cannot be intermingled through the tax amnesty program.  It involves complex issues and requires legislative authority not included in Public law 18-29

IMPORTANT: COMPLIANCE REQUIREMENTS

To avail of the Amnesty Program, a person must:

If the department issues a deficiency with respect to this return filed under the provisions of P.L. 18-29, the department may seek penalty and interest charges or pursue civil or criminal action only with respect to the difference between the tax shown on this return and the correct amount of tax.