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House of Representatives
Session of 2015 - 2016 Regular Session


Posted: April 22, 2015 03:18 PM
From: Representative George Dunbar
To: All House members
Subject: Amended Corporate Tax Returns
In the near future I will be introducing legislation to address a problem with the filing of amended corporate tax returns in Pennsylvania.
Currently, there is no statutory basis for the filing of an amended report to correct an error otherwise not required to be filed on a Report of Change (RCT-101). The filing of an amended report is provided for in the regulations (61 Pa. Code § 151.14). An example of this would be a multistate corporation files their Federal and all State tax returns, after filing they realize an error in how income is apportioned to the various states. This would not necessitate a change to their Federal return but would change their Pennsylvania return. In most states an amended return would be filed for the corporation to obtain a potential refund. Under current procedure the Department of Revenue has unbridled discretion in acting on an amended report. In addition, there is no requirement for the Department to communicate whether it will accept an amended report. There are no appeal rights if a taxpayer does not obtain the requested relief.
In other words, the Department of Revenue’s current policy is a trap for the unwary, especially out-of-state corporations doing business in Pennsylvania. In many instances, corporate taxpayers file amended reports as a means to correct a problem like the aforementioned one. Corporate taxpayers are unaware that the Department of Revenue will not grant relief on certain issues, e.g., business/nonbusiness income or equitable apportionment. In many instances, the Department of Revenue’s inaction results in a loss of appeal and refund rights.
The confusion results from the fact that the IRS and many states have formal procedures for filing amended returns, and in many instances appeal rights if relief is not granted. The Pennsylvania amended report process is an anomaly. The codification of an amended report process would constitute good tax policy and alleviate this trap for the unwary and provide a more economical way of resolving tax issues without having to use the formal administrative appeal/refund process.
My bill would remove this anomaly and make Pennsylvania Law consistent with other states while providing our corporations with certainty in our tax policy. Please join with me in co-sponsoring this legislation.

Introduced as HB1198