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Tax amnesty time

Despite a rough start, Pennsylvania's tax-amnesty program is worth the effort.

The state is giving tax cheats until June 18 to pay up. Revenue Secretary Daniel Hassell told the Inquirer Editorial Board in an interview that 26,000 filers have come forward to date with plans to pay more than $40 million in taxes owed.

State officials hope to recoup $190 million, money that's badly needed to help plug a budget deficit of more than $1 billion. Overall, the state is owed more than $2 billion in delinquent taxes.

More businesses and individuals should take this rare opportunity to settle up with the state, no questions asked. The state is forgiving all penalties and half of the interest owed. The last amnesty program occurred in 1995-96 under Gov. Tom Ridge.

The launch of this amnesty effort could have gone more smoothly. Hassell acknowledged that the first days after the program began April 26 were "unbelievably overwhelming." His department sent out about one million notices, and initially couldn't keep up with the deluge of phone calls and e-mails from concerned recipients.

Not all of the people who receive notices end up owing back taxes; some failed to file returns. Some owe as little as $25.

House Republicans deserve credit for pushing Gov. Rendell during last summer's budget fight to consider a tax amnesty. Rendell came around to the idea grudgingly, concerned that it would send the wrong message to people who pay their taxes on time.

But a similar effort in New Jersey last year raked in more than $700 million. Amnesty can be effective, if it's used sparingly.

There's more the state can do regularly to collect overdue taxes. State officials plan a five-year-long upgrade of the revenue department's outdated, incompatible computer systems. Some operations there are still done manually, Hassell said.

The Revenue Department and the Attorney General's Office also need to coordinate better to step up enforcement — revenue officials lack the authority to prosecute tax cheats.

Amnesty isn't the answer to the state's latest budget crisis, but it will help stave off deeper budget cuts. As a seldom-used option, it's worth the try.