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Pennsylvania’s Tax Amnesty Program: How to Get a Discount on Delinquent Taxes

Posted by Harry Pietrouchie on Mon, May 1, 2017

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PA tax amnesty.jpgIf you owe personal or business taxes to the state of Pennsylvania, now’s a good time to consider paying up.

The State of Pennsylvania recently enacted a Tax Amnesty Program, its first since 2010. Through June 19, 2017, the state has authorized a tax amnesty program that will waive all penalties and half of the interest owed on eligible tax delinquencies.

Any taxes administered by the Pennsylvania Department of Revenue are eligible for the amnesty program, including both business and personal taxes.

Eligible Taxes

Taxes eligible for the amnesty program include, but are not limited to, Capital Stock Tax, Corporate Net Income Tax, Personal Income Tax, and Sales and Use Tax. See here for a full list of the eligible taxes. Amnesty is only available for these taxes where a liability existed as of December 31, 2015.

For example, the 2014 personal income tax was due on April 15, 2015. This tax would be eligible for amnesty. However, the 2015 personal income tax was due on April 15, 2016. This year would not be eligible for amnesty. The tax must have been owed or due by December 31, 2015.

READ MORE: Pennsylvania Budget Proposal Seeks $1 Billion in Business Tax Changes

How to Participate

The Department of Revenue will send a written notice to any taxpayer with known delinquencies. This notice will contain important information on participation in the amnesty program. If there are delinquencies for multiple tax types, a taxpayer may receive more than one notice.

The taxpayer must complete and file the online amnesty return. The taxpayer must pay all of the taxes due along with one-half of the interest owed in accordance with the amnesty program. Any delinquent returns must also be filed. This would include 2016 returns that have been extended on April 18, 2017.

New Call-to-actionDisqualifications

There are several circumstances that would disqualify a taxpayer from being able to participate in the 2017 tax amnesty program. Taxpayers are unable to participate if they:

  • Are currently under criminal investigation for alleged violation of any tax law,
  • Are currently in a Voluntary Disclosure Agreement for periods covered by the amnesty program, or
  • Participated in the 2010 amnesty program

Furthermore, participation in the program constitutes an agreement by the taxpayer to waive their right to pursue an administrative or judicial proceeding with regards to any amnesty returns filed with the Department.

READ MORE: Pennsylvania Expands and Extends Tax Credits for Businesses

Other Compliance

Participation in the 2017 Amnesty Program means that the taxpayer must maintain continued compliance with the Pennsylvania Department of Revenue. Otherwise, all of the penalty and interest abated by the amnesty program may be re-imposed for taxpayers who have delinquencies in the future. The taxpayer will also be prohibited from participating in any future amnesty programs instituted by the Department.

The Bottom Line

Taxpayers with tax delinquencies known to the Pennsylvania Department of Revenue may participate in the 2017 Amnesty Program and receive abatement of all penalties and one-half of the interest owed on the delinquent tax. They will receive a written notice from the Department inviting them to participate in the program by filing an online amnesty return, paying outstanding taxes, and filing any delinquent returns.

For instances where the taxpayer is not contacted by the Department, but are aware of a tax delinquency, they may also participate. If you have not been contacted by the Department and believe you should have been, call 1-844-727-8283 for assistance. However, in this scenario, the taxpayer may achieve better results by entering into a Voluntary Disclosure Agreement with the Department.

Please be aware that there is a 5% non-participation penalty imposed on all delinquent tax, penalty and interest that is unpaid during the amnesty period. Should you receive a notice from the Department and choose not to participate, the additional penalty will be imposed.

We urge you to contact us with any questions regarding the 2017 Pennsylvania Tax Amnesty Program.

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Topics: Business tax planning, Individual tax planning

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This communication is designed to provide accurate and authoritative information in regard to the subject matter covered. However, the general information herein is not intended to be nor should it be treated as tax, legal, or accounting advice. Additional issues could exist that would affect the tax treatment of a specific transaction and, therefore, taxpayers should seek advice from an independent tax advisor based on their particular circumstances before acting on any information presented. This information is not intended to be nor can it be used by any taxpayer for the purposes of avoiding tax penalties.

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