PENNSYLVANIA — In a move designed to ease the burden on taxpayers caught in protracted tax disputes, Pennsylvania Treasurer Stacy Garrity, Senator Scott Hutchinson (R-21), and Representative Tim Briggs (D-29) have announced a bipartisan legislation. The proposed bill aims to simplify and expedite the process of resolving tax disputes with the Department of Revenue (DOR).
The legislation, set to be introduced later this month, will allow the Board of Finance & Revenue (BF&R) to accept late-filed applications under certain conditions. It also proposes a new settlement process as an alternative to the often lengthy court appeals process. The proposed changes have garnered support from various business and accounting bodies including the Pennsylvania Chamber of Business and Industry, the National Federation of Independent Business (NFIB), the Pennsylvania Institute of Certified Public Accountants (PICPA), and the Pennsylvania Society of Enrolled Agents.
Pennsylvania State Treasurer Stacy Garrity expressed that the current tax appeal process is unnecessarily burdensome and inflexible for taxpayers. “The legislation being introduced by Sen. Hutchinson and Rep. Briggs will result in a process that’s speedier and far less burdensome. This will be a huge step forward for taxpayers,” Garrity said.
Senator Hutchinson echoed these sentiments, stating that the bill would provide taxpayers with more time and options when responding to assessments by the DOR. He shared an incident involving a small business owner who could have benefited from the increased flexibility the proposal would offer.
Representative Briggs added that the reforms would not only help taxpayers resolve tax disputes swiftly but also benefit the Commonwealth by expediting tax issue resolution and directing valuable resources towards more complex cases.
Under the current system, taxpayers disagreeing with the DOR’s final decision have a strict 60-day deadline to appeal to the BF&R. This often leads to cases being dismissed on technicalities rather than on their merits. The proposed bill would allow the BF&R to accept late-filed applications if good cause is shown by the taxpayer and the reason for the late appeal is agreed upon by any other party involved.
The legislation would also empower the BF&R to establish a formal settlement process, enabling more tax disputes to be resolved without a final Board decision and thereby reducing litigation costs for taxpayers. Currently, the BF&R has no authority to direct such a process.
The BF&R, an independent administrative tax tribunal, receives approximately 4,200 appeals annually. The Board is required to resolve each appeal within six months of its filing; otherwise, the underlying DOR decision is upheld. As it stands, only about 13% of eligible appeals are resolved through settlement prior to an appeal before the Commonwealth Court.
The upcoming legislation aims to provide a more flexible, efficient, and fair system for Pennsylvania taxpayers navigating tax disputes, a development that is long overdue.
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