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The Revenue Services Department began offering both the carrot and the stick Monday to tax delinquents: pay up within the next 60 days at reduced interest and penalties or face more than double the penalties when the state catches up with you.

At a state Capitol press conference, Revenue Services Commissioner Kevin Sullivan announced the 2013 “Tax Amnesty” program, in which residents and businesses can pay most back taxes to the state with a 75-percent reduction in interest.

The state also is offering to waive late penalties for people who have not reported, or who have under-reported, their tax liabilities, if they pay the department before Nov. 30.

However, unlike previous tax amnesty programs, this year the state is beefing up the penalties for folks who do not pay off their liabilities during the two-month amnesty window. The department received legislative approval to hike the late penalty from 10 percent to 25 percent for deficiencies that are not resolved during the amnesty program.

“As of today, the clock is ticking. If taxpayers who owe money to the state don’t come forward and we do find out about you later — and we will — the penalty on the tax that you owe for many years will be two-and-a-half times the current penalty rate for tax deficiencies. That is a big penalty and it’s a lot to pay,” he said.

Sullivan said delinquencies that occur after the amnesty window will be subject to the traditional 10 percent penalty.

The state budget counts on the amnesty program to bring in at least $35 million in revenue. Rep. Patricia Widlitz, co-chairwoman of the legislature’s Finance Committee, said lawmakers expect the program to raise more than that.

Hugh McQuaid Photo

“I think for the purposes of budgeting, we tried to be very conservative. We do expect that this will generate more revenue. However, it’s our policy in formulating our budget to be very careful not to overestimate. I think we’re just being very cautious with that budget number,” she said.

John Biello, tax division chief for the DRS, said the department knows of about 80,000 Connecticut taxpayers who have a liability with the state. All told, those taxpayers owe about $400 million, he said.

Sullivan said this amnesty program is also open to people whose liabilities the state does not currently know about including residents who have gone for years without filing their taxes. Biello said there is another 80,000 residents who have either not filed with the department in years or who the state believes have under reported.

Sullivan said the new amnesty program is notable because is broader and applies to more residents than previous programs. He stressed that the program will not impact penalties on municipal or federal taxes. That means penalties on lateproperty taxes owed to towns will not be waived.

But Sullivan said the amnesty applies to nearly every tax levied by the state. The only state tax not included in the amnesty program is the state motor carrier tax. Taxpayers are eligible to participate in the program, even if they are being audited or have never filed a tax return with the state.

“All they have to do is go online at the Department of Revenue Services, pay up in full, and they will get a clean slate going forward,” he said. The department has set up information about the program online at www.makeitrightCT.com.

Sullivan said the only residents who are not eligible to participate are those currently being criminally prosecuted by the state, and those who are party to a closing or managed audit agreement with the state.

Widlitz said the program offers a “tremendous savings” for people who are behind in their finances.

“People get behind in their taxes for a lot of very good reasons. This is an opportunity for people to come forward,” she said. “. . . It’s good for the state of Connecticut because in all fairness, we all share the burden of taxes. Taxes support all of the programs and services that we need to provide.”