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Senate of Pennsylvania
Session of 2015 - 2016 Regular Session


Posted: December 2, 2014 01:42 PM
From: Senator John R. Gordner
To: All Senate members
Subject: Limitations to Prove Past EIT Payments
In the near future, I will be reintroducing SBs 67 and 68, which would 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.

In the recent past, 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 20 or more 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 SBs 67 and 68, 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 67 and 68 were: Brewster, Erickson, Hughes, Mensch, Tartaglione, Schwank, Rafferty and Folmer.

I invite you to join me as a co-sponsor of these bills. Please contact my office if you have any questions regarding this legislation.

Document #1

Introduced as SB132

Description: The first bill amends the Local Tax Enabling Act to accomplish what is described above.  This was SB 67 from the 2013-2014 Session.

Document #2

Introduced as SB133

Description: The second bill amends the Local Taxpayers Bill of Rights to accomplish what was described above.  This was SB 68 from the 2013-2014 Session.