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Gawthrop Attorney Featured On FOX 29 News

Stephen J. Olsen offers insights on Pennsylvania and Philadelphia tax amnesty programs

Tax attorney Stephen Olsen appeared on Philadelphia FOX 29 News to offer commentary on the Pennsylvania and Philadelphia Tax Amnesty programs (starting April 26 and May 3). Find out how the programs work and how you may be affected by reading highlights from the show below. In addition, Stephen is the author of 2010 Pennsylvania Tax Amnesty Progam (pdf file - 853k), an article that offers a comprehensive overview of the programs.

How can the Pennsylvania Tax Amnesty program benefit taxpayers?

1. Taxpayers who fail to file or fail to pay PA tax have penalties, which can be much higher than the outstanding tax, along with interest, added to their tax bill. The amnesty program allows all of the applicable penalties, and half of the outstanding interest, to be forgiven if taxpayers follow the proper procedures. Taxpayers have from April 26, 2010 until June 18, 2010 to take advantage of the Pennsylvania tax amnesty program.
2. Taxpayers who fail to avail themselves of the program, and are later audited, may have an additional 5% penalty applied for not entering the amnesty program.
3. Philadelphia is offering a similar program, running from May 3, 2010 to June 25, 2010.

Who will qualify for the Tax Amnesty program?

1. All taxpayers, individuals, businesses and even nonprofits are able to take advantage of the amnesty program if they have failed to file returns or other information, filed incorrect information, or failed to pay the full amount of tax due.
2. The program applies to all taxes administered by the Pennsylvania Department of Revenue, so this is not exclusively an income tax amnesty program.
3. Taxpayers who have participated in prior Pennsylvania amnesty programs, or are currently under criminal investigation, or are defendants in a legal action for violations of the tax law may not be eligible.

What do taxpayers need to do to enter the program, and how can they get more information?

1. The Department of Revenue will contact delinquent taxpayers that it knows about; however, this will only be a small fraction of the taxpayers eligible.
2. Taxpayers will need to file an Amnesty return, along with all back returns and other information for each tax year from 2004 to the present. Taxpayers will also need to pay all back tax, along with half of the interest otherwise due by June 18, 2010.
3. Taxpayers can get more information about the Pennsylvania program at www.pataxpayup.com, and can find more information about the Philadelphia program at www.phillytaxamnesty.com.
4. Taxpayers should consult with a tax professional prior to entering into the program. Failure to comply with the procedural requirements could leave the taxpayer liable for all interest and penalties. Further, failure to remain compliant with the applicable tax laws for the next two tax years could cause the interest and penalties to be reinstated. In addition, Philadelphia has another voluntary disclosure program that may be more advantageous for some taxpayers than the Philadelphia amnesty program.