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Senate of Pennsylvania
Session of 2013 - 2014 Regular Session


Posted: December 6, 2012 08:14 AM
From: Senator John R. Gordner
To: All Senate members
Subject: EIT Legislation
**NOTE** This is the same co-sponsor memo distributed yesterday. Mistakenly, the original (which cannot be changed and had to be deleted) did not specify that this requires two pieces of legislation (like last Session).

In the near future, I will be reintroducing legislation to establish an outer limit of 10 years for action by tax officers or political subdivisions to collect unpaid earned income taxes (EIT).

Current state law contains a limit of 3 years to take action to collect EIT in most cases. The limit is increased to 6 years if the EIT is found to be understated by at least 25%. However, the limits do not apply in cases of fraud or if there is a question of whether one has filed a return. Essentially, one could be required to provide proof of EIT payment at any time in the future.

Earlier this year, a constituent of mine was asked to provide proof (within 30 days) that he paid EIT for the years of 1991 through 1994 by a company that had just taken over tax collection duties in his county of residence. He believes that he paid the EIT for that period, but no longer has the necessary records to prove it. This has created a nightmare of a situation for him.

The Internal Revenue Service recommendation is for one to maintain his/her tax documentation for the previous 7 years. Looking back 18 to 21 years is well beyond any reasonable timeframe for maintaining these records. No one should have the burden of attempting to come up with documentation from so far in the past. Therefore, I introduced SB 1606 and 1607, which would have eliminated the open-ended nature of our state law and placed an outer limit of 10 years in all cases. It would not change the existing language that establishes the 3 and 6 year limits described above.

Co-sponsors of SB 1606 and 1607 that remain in the Senate are: Rafferty, Tartaglione, Brewster, Erickson, Hughes, Folmer, Mensch and Waugh.

Document #1

Introduced as SB67

Description: The first bill amends the Local Tax Enabling Act to accomplish what is described above.  This was SB 1606 from the 2011-2012 Session.

Document #2

Introduced as SB68

Description: The second bill amends the Local Taxpayers Bill of Rights to accomplish what was described above.  This was SB 1607 from the 2011-2012 Session.