Regular Session 2015-2016 House Bill 1888 P.N. 3037

PRINTER'S NO. 3037

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

1888

Session of

2015

INTRODUCED BY QUINN, PEIFER, SAYLOR, WATSON, MILNE, V. BROWN,

COHEN, D. COSTA, DRISCOLL, DUSH, ENGLISH, EVERETT, GIBBONS,

GROVE, HARHART, A. HARRIS, PHILLIPS-HILL, KAUFFMAN,

MACKENZIE, NEILSON, READSHAW, SANTORA, THOMAS AND TOOHIL,

APRIL 1, 2016

REFERRED TO COMMITTEE ON FINANCE, APRIL 1, 2016

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

2016-2017.

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-G

TAX AMNESTY PROGRAM FOR FISCAL YEAR 2016-2017

Section 2901-G. 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 60 consecutive days

established by the Governor in the fiscal year beginning July 1,

2016, and ending June 30, 2017, which shall start no later than

120 days after the effective date of this section.

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

"Eligible tax." Any tax administered by the Department of

Revenue delinquent as of December 31, 2015. The term includes

any interest or penalty on an eligible tax. For an unknown

liability, the term shall only include taxes due within five

years prior to December 31, 2015. For purposes of taxes

collected under the International Fuel Tax Agreement, the term

shall apply only to taxes, interest and penalties owed to the

Commonwealth, not to other states or Canadian provinces.

"Program." The tax amnesty program established under section

2902-G 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.

"Unknown liability." A liability for an eligible tax for

which either:

(1) no return or report has been filed, no payment has

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been made and the taxpayer has not been contacted by the

department concerning the unfiled returns or reports or

unpaid tax; or

(2) a return or report has been filed, the tax was

underreported and the taxpayer has not been contacted by the

department concerning the underreported tax.

Section 2902-F. Establishment of program.

(a) General rule.--A tax amnesty program is established and

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 December 31, 2015, including a liability for returns not

filed, liabilities according to records of the department as of

December 31, 2015, liabilities not reported, underreported or

not established, but delinquent as of December 31, 2015.

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 agreement

to the contrary, in full during the amnesty period.

Section 2903-G. Required payment.

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

taxpayers who participate in the program shall comply with all

of the following:

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

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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 or timely electronically or otherwise filed.

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

and one-half of the interest due to the Commonwealth in

accordance with the tax amnesty return that is filed. The

taxpayer shall not be required to pay any penalty applicable

to an eligible tax.

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

which the taxpayer previously has not filed a tax return and

file complete amended returns for all required years for

which the taxpayer underreported eligible tax liability.

(b) Prohibitions.--

(1) The department may not collect the penalties or

interest waived under subsection (a)(2). Except as otherwise

provided in this article, the department shall not pursue

administrative or judicial proceeding against a taxpayer with

respect to an eligible tax that is disclosed on a tax amnesty

return.

(2) A taxpayer with unknown liabilities reported and

paid under the program and who complies with all other

requirements of this article shall not be liable for any

taxes of the same type due prior to January 1, 2011. A

taxpayer shall not be owed a refund under this article.

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

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if:

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

is paid with the amnesty return or within the amnesty period.

(2) The balance due, including interest under subsection

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

before the end of the amnesty period.

Section 2904-G. 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 waived through the program 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-G. 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 may impose penalties and 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-G. Overpayment of tax.

Notwithstanding any other provisions of this article or any

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

credited within 180 days after the tax amnesty return is filed

or the eligible tax is paid, whichever is later, no interest

shall be allowed on the overpayment.

Section 2907-G. 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-G. Proceedings relating to tax amnesty return

barred.

Participation in the program shall be 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-G. Undisclosed liabilities.

Nothing in this article shall be construed to prohibit the

department from instituting civil or criminal proceedings

against a taxpayer with respect to an amount of tax that is not

disclosed on the tax amnesty return or an amount disclosed on

the amnesty return that is not paid.

Section 2910-G. Duties of department.

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

implement the provisions of this article. The guidelines shall

be published in the Pennsylvania Bulletin within 60 days of the

effective date of this section 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

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filed.

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

(4) The amnesty revenue estimates required under section

2912-G(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.

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 of 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 waived under the program.

(iii) The demographic characteristics of tax amnesty

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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 addresses

of the existence of the program. The sole purpose of the letter

sent by the department to taxpayers shall be notification of the

program.

Section 2911-G. Method of payment.

All tax payments under the program shall be made by certified

check, money order, electronic transfer, credit card, cash or

its equivalent.

Section 2912-G. 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, 2017,

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,

2017.

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

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

30, 2017.

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(b) Revenue estimates.--

(1) The department shall submit, for publication in the

Pennsylvania Bulletin:

(i) a separate amnesty revenue estimate for revenue

generated under this article from the following sources:

(A) The General Fund.

(B) The Motor License Fund.

(ii) The methodology used to develop the estimate.

(2) All amnesty revenue estimates shall be submitted for

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

Section 2913-G. Additional penalty.

(a) General rule.--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 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) pays 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.

section shall be in addition to all other penalties provided by

law.

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Section 2914-G. Construction.

Except as expressly provided in this article, this article

shall not:

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

other entity from the filing of a return or from a tax,

penalty or interest imposed by the provisions of any law;

(2) affect or terminate a petition, investigation,

prosecution, legal or otherwise, or other proceeding pending

under the provisions of any such law; or

(3) prevent the commencement or further prosecution of a

proceeding by the proper authorities of the Commonwealth for

violation of any such law or for the assessment, settlement,

collection or recovery of tax, penalty or interest due to the

Commonwealth under any such law.

Section 2915-G. 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. This act shall take effect in 60 days.

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