Pennsylvania’s 2017 tax amnesty program (“Amnesty Program”) is currently underway. Through June 19, 2017, qualifying taxpayers who satisfy their delinquent tax liabilities will receive abatement of all penalties and one-half of interest owed.
The Amnesty Program applies to over 30 types of taxes administered by the Pennsylvania Department of Revenue. Qualifying taxes include, but are not limited to: personal income tax, sales and use tax, employer withholding tax, corporate net income tax, inheritance and estate tax, capital stock/foreign franchise tax, and gross receipts tax. Taxes which are not eligible for the program include federal taxes, taxes imposed by another state, local and property taxes and unemployment compensation administered by the Pennsylvania Department of Labor.
Both businesses and individuals with overdue state taxes as of December 15, 2015 are encouraged to apply for the program. Taxpayers who failed to file returns for tax periods prior to 2015 are also generally eligible for this limited opportunity. However, if a taxpayer participated in the 2010 Pennsylvania tax amnesty program, is actively undergoing bankruptcy, or is currently under criminal investigation or restitution for allegedly violating the tax law, they are not eligible to participate in the 2017 program. Eligible taxpayers who fail to participate in the amnesty program will be assessed a five percent non-participation penalty on all eligible tax, penalties, and interest unpaid during the time of the program.
Notification regarding participation in the program will be mailed to taxpayers for whom the Pennsylvania Department of Revenue has a valid mailing address on record.
Those taxpayers who are accepted into the program with unknown tax liabilities reported and paid during the amnesty period are not liable for any taxes of the same type due prior to January 1, 2011.
Taxpayers should carefully review the terms of the amnesty program and consider whether its terms are more favorable than those of Pennsylvania’s Voluntary Disclosure Program, which will remain open during the amnesty period. Those who do not qualify for amnesty may consider applying the Voluntary Disclosure Program. It is important to note; however, that the Amnesty Program permits the filing of amended returns, while the Voluntary Disclosure Program only permits original returns.
The Trust and Estate attorneys at Obermayer Rebmann Maxwell & Hippel LLP strongly encourage those taxpayers owing delinquent taxes who qualify for the Amnesty Program to take advantage of this opportunity. Participants can apply for the Amnesty Program themselves at http://revenue.pas.gov/taxamnesty. The website allows taxpayers to file their returns and pay the delinquent taxes along with half of the interest owed. Taxpayers who are unsure whether they owe back taxes can refer to the Department of Revenue’s e-Services Center (https://www.doreservices.state.pa.us/Default.htm).
Janene B. Reilly is an attorney in Obermayer’s Philadelphia office, focusing her practice in the areas of estate planning and estate and trust administration. She can be reached at 215-665-3062 or Janene.Reilly@obermayer.com