The Tax Amnesty (Amnesty) Programs currently in effect with respect to Pennsylvania and Philadelphia taxes are drawing to a close. The Pennsylvania Amnesty program commenced on April 26, 2010 and ends on June 18, 2010. The Philadelphia Amnesty program commenced on May 3, 2010 ends on June 25, 2010. Both programs allow taxpayers to participate by paying outstanding tax plus one-half interest. Penalties and the other one-half interest are waived. Certain elements of each program are set forth herein. However, this Tax Advisor does not address all aspects of the Pennsylvania and Philadelphia Amnesty Programs and taxpayers interested in participating should consult their tax advisers.
- Amnesty applies to all taxes administered by the Pennsylvania Department of Revenue. Eligible periods are those where a known or unknown delinquency exists as of June 30, 2009. Unpaid taxes, interest and penalties from periods subsequent to June 30, 2009 are not eligible for the Amnesty Program.
- Participation requires the filing of an online Amnesty return, the filing of all delinquent tax returns (or amended returns where tax was under-reported) and the making of the required payment (tax and one-half of the interest due to the Commonwealth) within the Amnesty Period. The Amnesty Web site is www.PATaxPayUp.com.
- A taxpayer with unknown liabilities (those with respect to which the taxpayer has not been contacted by the Department of Revenue) that are paid during the Amnesty Period to the Department and who complies with all other requirements, is not liable for any taxes of the same type due prior to July 1, 2004.
- A taxpayer participating in the current Amnesty Program will be prohibited from participating in future amnesty programs.
- At the conclusion of the Amnesty Period, a 5 percent non-participation penalty will be imposed on all unpaid tax, penalty and interest not paid in full during the Amnesty Period. This is in addition to all other interest and penalties otherwise applicable. However, existing deferred payment plans, active appeals and entities in bankruptcy will not be assessed the additional 5 percent non-participation penalty.
- Amnesty applies to any taxes imposed and collected by the City of Philadelphia (the City) or the School District of Philadelphia (the School District) originally due and payable on or after Feb. 1, 1986 and on or before June 30, 2009 (the Eligibility Period).
- Participation requires the filing of an Amnesty Application with the Tax Amnesty Administrator including all information requested on the Amnesty Application form provided by the City or the Tax Amnesty Administrator. The Philadelphia Amnesty Web site is www.phillytaxamnesty.com.
- Delinquent taxpayers that are eligible for Amnesty and comply with the Amnesty requirements will satisfy their eligible tax delinquencies for all taxes imposed by or for the City or School District (except for the sales and use tax and hotel occupancy tax and the general acute care hospital assessment and high volume Medicaid hospital assessment) by filing any delinquent returns, paying all tax principal plus one-half of accrued interest plus all lien charges and court costs.
- A taxpayer that is delinquent in the filing of any return as of the beginning of the Amnesty Period is not be eligible for participation in Amnesty unless, by the close of the Amnesty Period, the taxpayer has filed all delinquent returns (whether or not the taxpayer is claiming Amnesty as to debts associated with such returns) and has so certified in the Amnesty Agreement. In other words, unlike the Pennsylvania Amnesty Program, there is no limitation on the “look back” period.
- Amnesty is available to any taxpayer who is delinquent in the payment of tax as of the first day of the Amnesty Period, however Amnesty is not available to a taxpayer who participated in any prior tax amnesty program of the City.
- No future amnesty program, if any, will permit abatement of interest or penalty with respect to any taxes first due on or before June 30, 2009.
It should be noted that the Philadelphia voluntary disclosure program will continue to be available during the Amnesty Program and in some cases, may be more beneficial than participation in the Philadelphia Amnesty Program.
Pennsylvania is one of several states that are or will be offering a tax amnesty program. If you would like more information on the Pennsylvania or Philadelphia programs, or on programs being offered in other states, please contact a member of our tax department.
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