THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY GEORGE, MELIO, ADOLPH, BELFANTI, BOBACK, BRADFORD, BRENNAN, BRIGGS, BROWN, CALTAGIRONE, CARROLL, CASORIO, COHEN, CONKLIN, D. COSTA, CREIGHTON, DONATUCCI, EVERETT, FAIRCHILD, FRANKEL, GIBBONS, GOODMAN, GRUCELA, HALUSKA, HARHAI, HARPER, HORNAMAN, JOHNSON, JOSEPHS, W. KELLER, KOTIK, KULA, LONGIETTI, McGEEHAN, McILVAINE SMITH, MICOZZIE, MILLARD, MUNDY, MURPHY, MURT, PAYNE, PHILLIPS, READSHAW, REICHLEY, SCAVELLO, SEIP, SIPTROTH, STABACK, STURLA, SWANGER, J. TAYLOR, TRUE, VULAKOVICH, WATERS, YOUNGBLOOD, YUDICHAK, EACHUS, BEYER, KORTZ, GINGRICH, BROOKS, HOUGHTON, MENSCH, BURNS AND MIRABITO, MAY 26, 2009

AS AMENDED ON THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES, SEPTEMBER 17, 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," further providing for continuation of the

Military Family Relief Assistance Program; and providing for

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a limited tax amnesty program.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 315.9 of the act of March 4, 1971 (P.L.6,

No.2), known as the Tax Reform Code of 1971, amended July 25,

2007 (P.L.373, No.55), is amended to read:

Section 315.9.  Operational Provisions.--(a)  Except for the

checkoff established under sections 315.2, 315.6 and 315.7 and

except as otherwise provided under subsection (b), the checkoffs

established under this part shall apply through taxable years

ending December 31, 2007.

(b)  [Any] Except as provided under subsection (d), any 

checkoff established under this part and applicable for the

first time in a taxable year beginning after December 31, 2003,

shall expire four years after the beginning of such first

taxable year.

(c)  Sections 315.3 and 315.4 shall expire January 1, 2010.

(d)  Any checkoff established under section 315.8 shall apply

through taxable years ending December 31, 2015.

Section 2.  The act is amended by adding an article to read:

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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 June 30, 2010.

"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 December 31,

2006. 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 1, 2009, including a liability for returns not filed,

liabilities according to records of the department as of June 1,

2009, liabilities not reported, underreported or not

established, but delinquent as of June 1, 2009.

(c)  Prior amnesty program participation.--The program shall

not apply to taxpayers who participated in the tax amnesty

program outlined in Article XXIX-A.

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

participates in the program shall not be eligible to participate

in a future tax amnesty program.

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 50% of all 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 50% of

all interest due to the Commonwealth or the penalties owed by a

taxpayer who participates in the program under subsection (a).

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.

Section 2904-D.  Amnesty contingent on continued.

Notwithstanding any other provision of this article, the

department may assess and collect from a taxpayer all penalties

and interest forgone 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

interest 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)  Regulations.--The department shall develop regulations

to implement the provisions of this article. The regulations

must be published in the Pennsylvania Bulletin within 90 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.

(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)  Report.--The department shall issue a report to the

General Assembly within 180 days after the end of the amnesty

period detailing the implementation of the program. The report

shall contain, but not be limited to, the following information:

(1)  A detailed breakdown of the department's

administrative costs in implementing the program.

(2)  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

into the following categories:

(i)  Amounts represented by assessments receivable

established by the department on or before the first day

of the amnesty period.

(ii)  All other amounts.

(3)  The total dollar amount of revenue collected by the

program.

(4)  The total dollar amount of penalties forgiven under

the program.

(5)  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, cash or its equivalent.

Section 2912-D.  Exemption from review process.

Notwithstanding any law to the contrary, the regulations

issued by the department for the program shall be exempt from

the regulatory review process provided in the act of June 25,

1982 (P.L.633, No.181), known as the Regulatory Review Act.

Section 2913-D.  Use of revenue.

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.

Section 2914-D.  Penalties for certain corporate officers.

If an officer or officers of a corporation or association

intentionally neglect or refuse to make reports to the Auditor

General, or to the department, or successively to the Auditor

General and to the department, as required by law, for any two

successive tax years, the officer or officers commit a

misdemeanor and shall, upon conviction, be sentenced to pay a

fine of not less than $2,500 nor more than $5,000. This fine

shall be in addition to any fine or prison sentence under

section 1704 of the act of April 9, 1929 (P.L.343, No.176),

known as The Fiscal Code.

Section 2915-D.  Further examination of books and records.

(a)  Authority.--The department or any of its authorized

agents is authorized to examine the books, papers and records of

any taxpayer or other persons in order to verify the accuracy

and completeness of any return or report made or, if no return

or report was made, to ascertain and assess any tax or other

liability owed to the Commonwealth.

(b)  Audit.--The department may determine, by desk, field or

other audit, the amount of tax or other liability required to be

paid to the Commonwealth. The department may determine the

liability based upon the facts contained in the return or report

being audited or other information in the department's

possession. The department may determine the liability based

upon a reasonable statistical sample or test audit performed in

accordance with the regulations of the department when the

individual being audited does not have complete records of

transactions or when the review of each transaction or invoice

would place an undue burden on the department to conduct an

audit in a timely and efficient manner.

(c)  Challenge by taxpayer.--The taxpayer may challenge the

accuracy of a statistical sample or test audit by providing

clear and convincing evidence that the method used for a

statistical sample or test audit is erroneous, lacks a rational

basis or produces a different result when the complete records

are considered.

Section 2916-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 2917-D.  Application of penalty and powers.

Sections 2914-D and 2915-D shall apply to all taxes collected

by the department.

Section 2918-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 2919-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 3.  This act shall take effect immediately.

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