April 27, 2010

Pennsylvania and Philadelphia Tax Amnesty Programs To Commence

Pennsylvania and Philadelphia Tax Amnesty Programs To Commence Tax & Business

States and local jurisdictions will sometimes provide tax amnesty programs to boost public revenues. These programs incent and benefit taxpayers by offering substantial reductions in interest and penalties that would be assessed in the normal course of an audit. Amnesty programs typically include most common tax types including personal income tax, corporate income tax, franchise tax and sales/use taxes.

Separate tax amnesty programs are set to begin in Pennsylvania and Philadelphia as follows:

Pennsylvania Tax Amnesty Program: April 26, 2010 through June 18, 2010
Philadelphia Tax Amnesty Program: May 3, 2010 through June 25, 2010

Pennsylvania Tax Amnesty Program
April 26, 2010 through June 18, 2010

  1. Under this program, 50% of interest and 100% of penalties on all eligible taxes that are delinquent as of June 30, 2009 will be waived for taxpayers who file returns and pay delinquencies (including the 50% of interest due).
  2. Eligible taxes include any tax administered by the Pennsylvania Department of Revenue and delinquent as of June 30, 2009.
  3. Amnesty applies to tax liabilities for five years prior to June 30, 2009 for taxes where no return has been filed, no payment has been made and the taxpayer has not been contacted by the Department of Revenue regarding unfiled returns or unpaid tax.
  4. Amnesty also includes taxes which a return has been filed, the tax was underreported and the Department has not contacted the taxpayer regarding the underreported tax.
  5. Taxpayers participating in this amnesty program are barred from participating in any future tax amnesty programs.

Philadelphia Tax Amnesty Program
May 3, 2010 through June 25, 2010

  1. The program will apply to all delinquent Philadelphia taxes that were originally due or payable from February 1, 1986 through June 30, 2009.
  2. Under the amnesty program, eligible taxpayers must pay 100% of the taxes due plus 50% of the interest due on the underpaid taxes. Penalties will be 100% abated.
  3. Taxpayers who have entered into a payment agreement may still participate in the amnesty program as long as all payments due under any agreement between July 1, 2009 and the start of the program are current.
  4. To participate in the program, a taxpayer will be required to complete to an application which will be released closer to the start date of May 3. The City will establish a website, phone number and a walk-in amnesty center.
  5. Taxpayers will be required to pay all past due tax delinquencies during this amnesty period in order to receive the 50% interest and 100% penalty waiver, unless the taxpayer can demonstrate financial hardship.

The Pennsylvania and Philadelphia tax amnesty programs are administered separately and each has its own application and qualification procedures. Please contact a member of your MarcumRachlin Tax team for further information.

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