Pennsylvania and Virginia Tax Amnesty Programs

Pennsylvania Tax Amnesty Program 

The Pennsylvania Department of Revenue (DOR) has implemented a Tax Amnesty Program, established by Act 84 of 2016, primed to begin on April 27, 2017, and end on June 19, 2017. 

The program applies to all Pennsylvania taxes administered by the state DOR. Individuals, businesses and other entities that have Pennsylvania tax delinquencies, known or unknown to the DOR, as of December 31, 2015, are eligible for the program. Taxpayers who participated in the 2010 Pennsylvania Tax Amnesty Program are ineligible to participate in the 2017 program.  

Non-filed tax returns or reports, as well as unpaid or under-reported tax liabilities are considered eligible tax delinquencies, whether known or unknown to the Pennsylvania DOR. Unpaid taxes due after December 31, 2015, are not eligible for the program. Taxes must be filed by June 19, 2017, to participate in the program. 

Under the program, the DOR will waive all penalties and one half of the interest. Therefore, taxpayer participants will be responsible for the tax liability and one half of the interest. Pennsylvania has not yet released the application for applying to the tax amnesty program. 

Virginia Tax Amnesty Program 

On February 20, 2017, the Virginia Governor signed HB 2246, allowing the Virginia Department of Taxation (the Department) to establish a tax amnesty program. Specific enrollment dates have not yet been released, but the program will take place sometime between July 1, 2017, and June 30, 2018, for a period of 60 and 75 days. With certain exceptions, the program is eligible to taxpayers who currently have an outstanding assessment or have not filed a return for any tax administered by the Department. 

The following taxpayers will not be eligible to participate in the program:

  •  Any taxpayer currently under investigation or prosecution for filing a fraudulent return or failing to file a return with the intent to evade tax;
  • Any taxpayer with an assessment date or due date for an unfiled return less than 90 days prior to the first day of the amnesty program;
  • Any taxpayer with an individual, fiduciary or corporate income tax liability for taxable year 2016 or after; and
  • Any taxpayer with respect to a tax liability attributable to an issue that is the subject of a decision of a Virginia court rendered on or after January 1, 2016.

Under the current legislation, the Department will waive all civil and criminal penalties and one half of the interest for eligible taxpayers who pay their liability by the date required. Taxpayers who are eligible for the program, but do not elect to participate in the program, will be penalized 20 percent on their unpaid tax liabilities. This penalty is in addition to any existing penalties already assessed by the department. In addition, if a taxpayer participates in the program, but fails to remit the full payment of taxes due, then the taxpayer is subject to reinstatement of the penalty and interest forgiven, plus the imposition of the additional 20 percent penalty. 

For questions about these law changes or other state and local tax matters, please contact us.