THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY SMUCKER, PILEGGI, ORIE, BAKER, GREENLEAF, PIPPY, ROBBINS, BOSCOLA, EICHELBERGER, YAW, ARGALL AND PICCOLA, JULY 31, 2009

REFERRED TO FINANCE, JULY 31, 2009  

AN ACT

Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An

act relating to tax reform and State taxation by codifying

and enumerating certain subjects of taxation and imposing

taxes thereon; providing procedures for the payment,

collection, administration and enforcement thereof; providing

for tax credits in certain cases; conferring powers and

imposing duties upon the Department of Revenue, certain

employers, fiduciaries, individuals, persons, corporations

and other entities; prescribing crimes, offenses and

penalties," providing for tax amnesty program for fiscal year

2009-2010; and making a related repeal.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The act of March 4, 1971 (P.L.6, No.2), known as

the Tax Reform Code of 1971, is amended by adding an article to

read:

ARTICLE XXIX-D

TAX AMNESTY PROGRAM FOR

FISCAL YEAR 2009-2010

Section 2901-D.  Definitions.

The following words, terms and phrases, when used in this

article, shall have the meanings ascribed to them in this

section, except where the context clearly indicates a different

meaning:

"Amnesty period."  The time period of 90 consecutive days

established by the Governor during the fiscal year beginning

July 1, 2009, and ending May 15, 2010, and subsequent to the

publishing of guidelines and estimates under section 2910-D(a).

"Department."  The Department of Revenue of the Commonwealth.

"Eligible tax."  Any tax imposed by the Commonwealth for

deposit in the General Fund, the Motor License Fund or the

Liquid Fuels Tax Fund for taxes delinquent as of June 30, 2008.

The term includes any interest or penalty on an eligible tax.

The term excludes any tax imposed by a political subdivision.

"Program."  The tax amnesty program as provided for in this

article.

"Taxpayer."  Any person, association, fiduciary, partnership,

corporation or other entity required to pay or collect any of

the eligible taxes. The term shall not include a taxpayer who,

prior to the amnesty period, has received notice that the

taxpayer is the subject of a criminal investigation for an

alleged violation of any law imposing an eligible tax or who,

prior to the amnesty period, has been named as a defendant in a

criminal complaint alleging a violation of any law imposing an

eligible tax or is a defendant in a pending criminal action for

an alleged violation of any law imposing an eligible tax.

Section 2902-D.  Establishment of program.

(a)  Program established.--There is established a tax amnesty

program which shall be administered by the department.

(b)  Applicability.--The program shall apply to a taxpayer

who is delinquent on payment of a liability for an eligible tax

as of June 30, 2008, including a liability for returns not

filed, liabilities according to records of the department as of

June 30, 2008, liabilities not reported, underreported or not

established, but delinquent as of June 30, 2008.

(c)  Future amnesty program participation.--A taxpayer who

participates in the program shall not be eligible to participate

in a future tax amnesty program.

(d)  Deferred payment plan agreement.--Existing deferred

payment plan agreements between a taxpayer and the department

where the agreement applies to a tax liability for which amnesty

is sought by the taxpayer for amounts remaining on the tax

liability, the taxpayer, as a condition of receiving amnesty,

shall pay the liability, notwithstanding terms of the the

agreement to the contrary, in full by May 15, 2010, or the date

stated on a bill issued by the department, whichever is later.

Section 2903-D.  Required payment.

(a)  Taxpayer requirements.--Subject to section 2904-D, all

taxpayers who participate in the program shall comply with all

of the following:

(1)  During the amnesty period, file a tax amnesty return

in such form and containing such information as the

department shall require. A tax amnesty return shall be

considered to be timely filed if it is postmarked during the

amnesty period.

(2)  During the amnesty period, make payment of all taxes

and one-half of the balance of interest due to the

Commonwealth in accordance with the tax amnesty return that

is filed.

(3)  File complete tax returns for all years for which

the taxpayer previously has not filed a tax return and file

complete amended returns for all years for which the taxpayer

underreported eligible tax liability.

(b)  Prohibitions.--The department shall not collect the

penalties or interest owed by a taxpayer to which amnesty

applies under subsection (a)(2). The department shall not pursue

any administrative or judicial proceeding against a taxpayer

with respect to any eligible tax that is disclosed on a tax

amnesty return.

(c)  Financial hardship.--A taxpayer otherwise eligible for

amnesty, who certifies on an amnesty return, that making payment

of the full amount of the liability for which amnesty is sought

at the time such return is made would create a severe financial

hardship for such taxpayer, shall retain eligibility for amnesty

if:

(1)  Fifty percent or more of the amount due as computed

is paid with the amnesty return or within the time stated on

a bill issued by the department.

(2)  The balance due, including interest under subsection

(a)(2), is paid, in no more than two installments on or

before the earlier of May 15, 2010, or the date stated on a

bill issued by the department.

Section 2904-D.  Amnesty contingent on continued compliance.

Notwithstanding any other provision of this article, the

department may assess and collect from a taxpayer all penalties

and interest foregone through the tax amnesty program

established in this article if, within two years after the end

of the program, either of the following occurs:

(1)  the taxpayer granted amnesty under this article

becomes delinquent for three consecutive periods in payment

of taxes due or filing of returns required on a semimonthly,

monthly, quarterly or other basis and the taxpayer has not

contested the tax liability through a timely valid

administrative or judicial appeal; or

(2)  the taxpayer granted amnesty under this article

becomes delinquent and is eight or more months late in

payment of taxes due or filing of returns on an annual basis

and the taxpayer has not contested the liability through a

timely valid administrative or judicial appeal.

Section 2905-D.  Limitation of deficiency assessment.

If, subsequent to the amnesty period, the department issues a

deficiency assessment with respect to a tax amnesty return, the

department shall have the authority to impose penalties and to

pursue a criminal action only with respect to the difference

between the amount shown on that tax amnesty return and the

current amount of tax.

Section 2906-D.  Overpayment of tax.

Notwithstanding any other provisions of this article or any

other act, if an overpayment of eligible tax is refunded or

credited within 180 days after the tax amnesty return is filed,

no interest shall be allowed on the overpayment.

Section 2907-D.  Previously paid interest and penalties.

No refund or credit shall be allowed for any interest or

penalty on eligible taxes paid to the department prior to the

amnesty period.

Section 2908-D.  Proceedings relating to tax amnesty return

barred.

Participation in the program is conditioned upon the

taxpayer's agreement that the right 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 is barred.

Section 2909-D.  Undisclosed liabilities.

Nothing in this article shall be construed to prohibit the

department from instituting civil or criminal proceedings

against any taxpayer with respect to any amount of tax that is

not disclosed on the tax amnesty return.

Section 2910-D.  Duties of department.

(a)  Guidelines.--The department shall develop guidelines to

implement the provisions of this article. The guidelines must be

published in the Pennsylvania Bulletin within 45 days of the

effective date of this article and shall contain, but not be

limited to, the following information:

(1)  An explanation of the program and the requirements

for eligibility for the program.

(2)  The dates during which a tax amnesty return may be

filed.

(3)  A specimen copy of the tax amnesty return.

(4)  The amnesty revenue estimates required under section

2912-D(b).

(b)  Publicity.--The department shall publicize the program

to maximize public awareness of and participation in the

program. The department shall coordinate to the highest degree

possible its publicity efforts and other actions taken to

implement this article.

(c)  Reports.--The department shall issue reports to the

General Assembly detailing program implementation. The reports

shall contain the following information:

(1)  Within 30 days after the end of the amnesty period:

(i)  A detailed breakdown of the department's

administrative costs in implementing the program.

(ii)  The total dollar amount of revenue collected by

the program.

(2)  Within 180 days after the end of the amnesty period:

(i)  The number to tax amnesty returns filed and a

breakdown of the number and dollar amount of revenue

raised for each tax by calendar year during which the tax

period ended. In addition, the gross revenues shall be

broken down in the following categories:

(A)  Amounts represented by assessments

receivable established by the department on or before

the first day of the amnesty period.

(B)  All other amounts.

(ii)  The total dollar amount of penalties and

interest forgiven under the program.

(iii)  The demographic characteristics of tax amnesty

participants, including North American Industry

Classification System codes of participants, type of

taxpayer, consisting of individual, partnership,

corporation or other entity, size of tax liability and

geographical location.

(d)  Notification.--The department shall notify in writing

all known tax delinquents at the taxpayers' last known address

of the existence of the tax amnesty program. The sole purpose of

the letter sent by the department to taxpayers must be

notification of the program.

Section 2911-D.  Method of payment.

All tax payments under the program shall be made by certified

check, money order, electronic transfer, cash or its equivalent.

Section 2912-D.  Use of revenue.

(a)  Restricted revenue account.--Except as set forth in

subsection (c), all revenue generated by this article shall be

deposited into a restricted revenue account in the General Fund.

Revenue from the restricted revenue account shall be distributed

as follows:

(1)  All money from General Fund sources shall be

deposited in the General Fund no later than June 30, 2010,

less repayment of any costs for administration of the program

to the department.

(2)  All revenue from Motor License Fund sources shall be

deposited in the Motor License Fund no later than June 30,

2010.

(3)  All revenue from Liquid Fuels Tax Fund sources shall

be deposited in the Liquid Fuels Tax Fund no later than June

30, 2010.

(b)  Revenue estimates.--

(1)  The department shall submit for publication in the

Pennsylvania Bulletin:

(i)  A separate amnesty revenue estimate for revenue

generated by this article from General Fund, Motor

License Fund, and Liquid Fuels Tax Fund sources.

(ii)  The methodology used to develop the estimate.

(2)  All amnesty revenue estimates shall be submitted for

publication pursuant to section 2910-D(a)(4).

(c)  Budget Stabilization Reserve Fund.--All revenue

generated by this article in excess of the amnesty revenue

estimates under subsection (b) and the cost of administration of

this article shall be deposited into the Budget Stabilization

Reserve Fund.

Section 2913-D.  Additional penalty.

(a)  Penalty.--Subject to the limitations provided under

subsection (b), a penalty of 5% of the unpaid tax liability and

penalties and interest shall be levied against a taxpayer

subject to an eligible tax if the taxpayer had failed to remit

an eligible tax due or had an unreported or underreported

liability for an eligible tax on or after the first day

following the end of the amnesty period.

(b)  Nonapplicability.--The penalty provided in this section

shall not apply to a taxpayer who:

(1)  has paid the liability in full or entered into a

duly approved and executed deferred payment plan on or before

the last day of the amnesty period; or

(2)  has filed a timely and valid administrative or

judicial appeal contesting the liability on or before the

last day of the amnesty period.

(c)  Penalty in addition.--The penalty provided by this

section shall be in addition to all other penalties provided by

law.

Section 2914-D.  Construction.

Except as expressly provided in this article, this article

shall not:

(1)  be construed to relieve any person, corporation or

other entity from the filing of returns or from any taxes,

penalties or interest imposed by the provisions of any laws;

(2)  affect or terminate any petitions, investigations,

prosecutions, legal or otherwise, or other proceedings

pending under the provisions of any such laws; or

(3)  prevent the commencement or further prosecution of

any proceedings by the proper authorities of the Commonwealth

for violation of any such laws or for the assessment,

settlement, collection or recovery of taxes, penalties or

interest due to the Commonwealth under any such laws.

Section 2915-D.  Suspension of inconsistent acts.

All acts or parts of acts inconsistent with the provisions of

this article are suspended to the extent necessary to carry out

the provisions of this article.

Section 2.  Repeals are as follows:

(1)  The General Assembly declares that the repeal under

paragraph (2) is necessary to effectuate the addition of

Article XXIX-D of the act.

(2)  Article XXIX-A of the act is repealed.

Section 3.  This act shall take effect immediately.