Pennsylvania’s 2017 Tax Amnesty Program

By Harold Hecht, Seth Rabe and Katie Massey

Pennsylvania has initiated its 2017 Tax Amnesty Program for all taxes administered by the Commonwealth’s Department of Revenue.  The Amnesty Program will end on June 19, 2017. Participation in the Amnesty Program allows all penalties, collection and lien fees, and 50% of the interest due to be abated.

Conditions of Taxpayer Participation

To participate, taxpayers must file an online Amnesty Return and all delinquent tax returns, and pay remaining balances within the Amnesty Period.  Eligible tax periods for the program include those where a delinquency exists as of December 31, 2015.  Unpaid taxes, penalties, and interest from periods following December 31, 2015 are not included in the 2017 Pennsylvania Tax Amnesty Program.  However, to participate in the Program, unfiled returns and unpaid taxes will need to be resolved for all periods, including those due after December 31, 2015.  A taxpayer who is actively in the process of an administrative or judicial review is eligible to participate if the taxpayer withdraws appeals related to periods included within the Amnesty Program.

Participation Incentives

The Pennsylvania Amnesty Program offers abatement of all penalties, collection and lien fees, as well as 50% of the interest due for all tax periods ending on or before December 31, 2015.  Beyond these deductions, the state has provided additional incentives to participate in the Program.  Any taxpayer with unknown tax liabilities that are reported and paid during the Amnesty Program will receive a limited lookback, with any taxes of the same type related to a period prior to January 1, 2011 being ineligible for the state to pursue.  Furthermore, a 5% penalty will be levied on all eligible tax, penalties, and interest which are not reported and paid by taxpayers who choose not to participate in the Amnesty Program.

In Summary

Taxpayers with outstanding taxes, penalties, collection and lien fees, and interest, should consider participating in Pennsylvania’s current Tax Amnesty Program.  Incentives to participate are high, but taxpayers should balance the costs of participation with the value of a Voluntary Disclosure Agreement (VDA). The VDA Program is still available during the Amnesty Period, and can include periods following the Amnesty Program’s cut off deadline of December 31, 2015.  A Voluntary Disclosure Agreement may be a better option for taxpayers with significant remaining taxes in tax periods subsequent to 2015.

Pennsylvania has viable options for taxpayers looking to resolve outstanding taxes. Please contact your Mazars USA professional, or our State & Local Tax Services team for consultation on any questions regarding the Pennsylvania Tax Amnesty Program.