PENNSYLVANIA TAX AMNESTY NEWS

The Pennsylvania Department of Revenue (PADOR) has posted some initial guidance on its website on Pennsylvania's upcoming tax amnesty. If you recall, one of the key provisions in the currently passed budget (Act 48, signed into law October 9, 2009) was a provision for tax amnesty for a period from April 26, 2010 to June 18, 2010. During this 54 day time period, Pennsylvania is willing to waive 100% of the penalties and 50% of the interest for taxpayers who pay their delinquent state taxes.

Additional information will be posted to the PADOR's website as we get closer to the Amnesty date. Also the Department of Revenue will be sending out correspondence to taxpayers about the amnesty program within the next couple months.

The following are some FAQs from the PADOR's website:

 - How long is the amnesty period? 54 days, from April 26 to June 18, 2010

 - Who qualifies? Individuals, businesses and other entities with tax delinquencies as of June 30th, 2009.

 - Which taxes qualify? All taxes administered by the PADOR are eligible. Some taxes that qualify: Capital Stock/Franchise Taxes, Corporate Net Income Taxes, Sales & Use Taxes, Loans Tax, Inheritance Taxes, Employer Withholding Tax, Realty Transfer Taxes.

 - For which years do back taxes need to be filed/paid? For periods/taxes unknown to PADOR - Only undisclosed tax delinquencies dating back to July 1, 2004. For periods and delinquencies known to PADOR - All period returns and taxes must be filed and paid.

 - What are the consequences of not participating in amnesty? A 5% non-participation penalty will be added to the final balance.

 - What are the consequences of waiting until amnesty period? The PADOR states that it will continue all of its current enforcement methods, including liens and garnishments, until amnesty period begins.

 - Can taxpayers that are already on a deferred payment plan apply for amnesty? Yes, BUT all remaining tax and 50% of interest must be paid in full before close of amnesty period on June 18, 2010. Penalty and interest relief is available only on the P&I balance that is in the taxpayer's account during the amnesty period.

 - Will there be refunds on Penalties and Interest (P&I) paid? No, payments on P&I made before the amnesty are non-refundable.

How to obtain/file for amnesty:

Between April 26 and June 18, 2010:

     - File an amnesty return online with the PADOR.

     - File all delinquent returns.

     - Pay all delinquent taxes, plus 50% of the interest due.

For the taxpayer to receive penalty and interest relief, all taxes and 50% of interest must be paid during the 54 day amnesty period.

Please contact Terry Martin or Hal Margolit, Tax Managers, at 215-675-8364 with any questions.