Assessments No Longer Mailed Certified. The Department of Revenue is no longer required to send assessments via certified mail. While the use of certified mail had originally been proposed by the Department, it appears that cost-cutting considerations have impacted the Department’s thinking. The business community is obviously opposed to this change.
Adjustments Not Immediately Impacting Tax. The Department now provides taxpayers an opportunity to contest an adjustment that does not change the current tax. The tax code now authorizes the inclusion these issues in petitions for reassessment. The statute specifically recognizes the following:
- Recalculation of the Corporate Net Income Tax Net Loss as adjusted by the Department.
- Recalculation of the average net income component of Pennsylvania’s Capital Stock/Franchise Tax by the Department.
- Recalculation of basis for purposes of the Personal Income Tax as adjusted by the Department.
Taxpayers still have the option of challenging these adjustments in subsequent years when the Department’s adjustment impacts the tax.
Authority for Compromise. The Department implemented a compromise process for the Board of Appeals, but the legal authority for such compromises had been questioned. The statute now provides that the Secretary of Revenue may compromise any civil matter in an administrative appeal. The compromise made by the Department administrative body may be based on doubt as to liability and to promote effective tax administration.
Refund Limitations Extended. Two refund statutes of limitations have been extended. The first applies to a situation where an audit does not provide a credit for tax paid during the audit period. In those cases, taxpayers can now file refund petitions using a deadline of the later of three years from the date of payment or six months from the mailing date of the audit assessment, determination or settlement. The second applies to tax paid as a result of an assessment, determination or settlement. In those cases, a petition for refund can be filed with a deadline of six months from the date of payment. Previously, the deadline was six months from the date of the assessment.
In New Jersey and Pennsylvania, individuals with questions regarding tax law, or requiring assistance with business planning, entity selection or business organization, including corporate organization, are invited to contact the Dopkin Law Firm to consult with a skilled business planning attorney and tax lawyer. Please call us at 215-519-4269 or fill out our intake form online.