Pennsylvania Tax Amnesty Begins

Pennsylvania’s Tax Amnesty period from April 26 to June 18, 2010.

During this limited, 54-day timeframe, the Pennsylvania Department of Revenue will waive 100 percent of penalties and half of the interest for anyone who pays his/her delinquent state taxes.

Individuals, businesses and other entities with Pennsylvania tax delinquencies as of June 30, 2009, are generally eligible to participate in the Tax Amnesty Program.

Under the amnesty program, the Pennsylvania Department of Revenue will waive 100 percent of penalties and half of the interest for taxpayers paying delinquent state taxes under the amnesty program.

Pennsylvania has established an amnesty website for taxpayers:

http://taxes.about.com/od/statetaxes/a/Pennsylvania-tax-amnesty.htm

The program applies to all Pennsylvania taxes administered by the Department of Revenue that are delinquent as of June 30, 2009 and to unknown liabilites for five years prior to June 30, 2009.

The Department will send a written notice to the last known address on the Department’s records. This notice will contain important information for the recipients to participate in the Amnesty Program. A taxpayer, who has delinquencies for multiple tax types, may receive more than one notification.

A participating taxpayer in the Amnesty Program must do each of the following during the Amnesty period:

• File an online Amnesty Return with the Department;

• Make payment of all taxes and one-half of the interest due to the Commonwealth in accordance with the Amnesty Return that is filed;

• File complete tax returns for all required tax periods for which the taxpayer previously has not filed a tax return; and

• File complete amended returns for all required periods for which the taxpayer underreported tax liability.

Taxpayers with liabilities subject to deferred collection plans may seek amnesty for the unpaid portion of its tax liabilities by fully paying the amnesty eligible amount before the end of the amnesty period.

Participation in the amnesty program is conditioned upon the taxpayer’s agreement not to protest or pursue an administrative or judicial proceeding with regard to tax amnesty returns filed under the program or to claim any refund of money paid under the program.

Taxpayers subject to criminal investigation or prosecution are not elgible to particpate in the amnesty program.

Amnesty is contingent on continued tax compliance by a participating taxpayer.  All penalties abated through the tax amnesty program can be reimposed if, within two years after the end of the amnesty program the taxpayer becomes delinquent for three consecutive periods in payment of taxes due or filing of returns required on a semimonthly, monthly, quarterly or other basis.

If within two years after the end of the amnesty program the taxpayer becomes delinquent and is eight or more months late in payment of taxes due or filing of returns on an annual basis, amnesty penalties can be reimposed. A taxpayer contesting a tax liability through a timely valid administrative or judicial appeal will not be considered out of compliance.

The amnesty program is projected to raise $190 million during fiscal 2009-10.  That revenue increase iwll be partially offset by a decrease in fiscal year 2010-11 revenue of $57 million.