Philadelphia, PA – The State of Pennsylvania is offering individuals and businesses a reprieve from underpaid or unpaid state taxes, but time is running out. The tax specialists at the top-30 CPA firm WithumSmith+Brown, PC (Withum) are urging those with outstanding tax payments to file delinquent tax returns and pay past-due taxes with a 50% reduction in interest and no assessment of penalties. The deadline is June 19th.
“As a result of the amnesty program, additional scrutiny will come from state officials in 2017 and 2018, so if you anticipate your business will have Pennsylvania state tax nexus in the near future, be sure to properly register and file now,” said Ruth Seip, CPA, a Withum tax manager. Based in Princeton, N.J., Withum maintains Pennsylvania regional offices in Philadelphia’s Logan Square and Montgomery County’s Blue Bell.
The amnesty program, which took effect April 21, 2017, was launched by the State of Pennsylvania to close a revenue deficit by the end of June. The state is owed more than $3.47 billion is unpaid taxes from individuals and businesses across all 67 Pennsylvania counties.
Withum reports 30 different tax types administered by the Pennsylvania Department of Revenue are covered under the amnesty programs. These include, but are not limited to, personal income tax, sales-and-use tax, corporate net-income tax, capital stock/foreign franchise tax, employer withholding tax and realty transfer tax.
According to Seip, eligibility applies to individuals and businesses with unpaid or underpaid taxes as well as those who did not file for tax periods due on or before December 31, 2015. In addition, taxpayers who have not filed, not paid or not reported and have not already been contacted by Pennsylvania, could qualify for a limited look-back period to January 1, 2011.
“In this case, all taxes for periods January 1, 2011 forward must be filed and paid by June 19, 2017 in order to be approved for the amnesty program. This includes any non-filed periods due after December 31, 2015,” she said. “Taxpayers should compare the terms of the amnesty program to those of Pennsylvania’s Voluntary Disclosure Agreement (VDA) program to determine which is more favorable, based on their situation.”
If the taxpayer has delinquent returns or taxes due after December 31, 2015, those periods must also be filed and paid by June 19, 2017 in order for the taxpayer to participate in the amnesty program for prior periods. After being accepted, the taxpayer must remain compliant by filing returns and remitting taxes timely for at least two years.
“Pennsylvania recently sent notices to delinquent taxpayers that contain the type of tax, the tax period and the amount due, if known,” said Seip. “Do not ignore these notices. Failure to participate in the program, whether or not notified, will result in assessment of a five percent non-participation penalty on all eligible amounts unpaid during the amnesty program.”
To participate in the Pennsylvania Tax Amnesty Program, which expires June 19, 2017, file an application and pay the liability through the website https://www.backtax.pa.gov or call the Tax Amnesty hotline at 1-844-727-8283.
Founded in 1974, Withum is a regional audit, tax and advisory accounting firm with 14 offices, 900 staff members and annual revenue of $140M, ranking in the top 30 firms in the country. In addition to the Princeton, Philadelphia and Blue Bell locations, the firm has several other offices throughout New Jersey; New York City, NY; Orlando and West Palm Beach, FL; Boston, MA; Aspen, CO; and Cayman Island.