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BF&R handles taxpayer appeals involving Pennsylvania’s Department of Revenue
Harrisburg, PA — Pennsylvania Treasurer Stacy Garrity, Sen. Scott Hutchinson (R-21) and Rep. Tim Briggs (D-29) today announced bipartisan, pro-taxpayer legislation to streamline and improve the process of resolving disputes with the Department of Revenue (DOR).
The legislation, to be introduced this month, will allow the Board of Finance & Revenue (BF&R) to accept late-filed applications in certain circumstances and create a new settlement process for taxpayers as an alternative to the formal and lengthy court appeals process. The bill is supported by the Pennsylvania Chamber of Business and Industry, the NFIB, the Pennsylvania Institute of Certified Public Accountants (PICPA), and the Pennsylvania Society of Enrolled Agents.
“Far too many Pennsylvania taxpayers have found themselves stuck in an unforgiving, bureaucratic tax appeal process – and it’s time for us to give them a way out,” Treasurer Garrity said. “Some of the current rules are inflexible for no good reason. 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.”
“This legislation is a taxpayer protection proposal, pure and simple,” Sen. Hutchinson said. “Sometimes our state’s tax collection agency gets a little overzealous in how it interprets applicable law. Our bill gives taxpayers more time and options when responding to assessments by the Department of Revenue. In fact, earlier this month I spoke with a small business owner from Oil City who would have likely benefited from the increased flexibility that this proposal would give to BF&R. Instead, he was stuck with a heavy-handed and, I believe, unfair decision by the Department of Revenue.”
“For far too long, many of us in the Legislature have heard from constituents who get caught in the tax appeals process,” Rep. Briggs said. “These bipartisan reforms will not only help taxpayers amicably and expeditiously resolve tax disputes but will also benefit the Commonwealth by resolving tax issues sooner, collecting tax liabilities quicker and directing valuable resources towards more complex cases.”
“The PA Chamber advocates for tax reforms that embody the principles of competitiveness, predictability, fairness, and simplicity,” said Luke Bernstein, President and CEO of the Pennsylvania Chamber of Business and Industry. “This bipartisan proposal will make needed reforms to the tax appeals process and lead to a quicker and fairer resolution to disputes, which is in the best interest of taxpayers and the Commonwealth. We thank Treasurer Garrity, Senator Hutchinson, and Representative Briggs for their leadership on this important legislation.”
“NFIB is happy to see this bipartisan proposal take shape,” said Greg Moreland, NFIB State Director. “Far too often small business owners find themselves involved in complicated bureaucratic processes which take time, energy, and money away from their core business. NFIB thanks Senator Hutchinson, Representative Briggs, and Treasurer Garrity for this thoughtful proposal.”
“PICPA appreciates the opportunity to work with the team at Treasury and BF&R on this important, taxpayer-friendly legislative initiative,” said Jennifer Cryder, CPA, CEO of PICPA. “I also want to thank the members of the PICPA State Taxation Steering Committee for their effort to advance this initiative. We believe this legislation will help taxpayers who may not have a professional tax adviser by helping them get a more rapid settlement to their case.”
“We welcome the fact that Treasurer Garrity, Sen. Hutchinson and Rep. Briggs listened to the small business community, and acted on our concerns,” said Warren Hudak, President of the Pennsylvania Society of Enrolled Agents. “This kind of certainty will allow us to serve our clients better and work to come to quick resolution on sometimes very complicated matters.”
Taxpayers who disagree with a final decision made by DOR currently have a strict 60-day deadline to appeal the decision to BF&R. That often leads to cases being dismissed on a technicality rather than being decided on the merits. The proposed legislation allows BF&R to accept late-filed applications if good cause is shown by the taxpayer and the reason permitting the late-filed appeal is agreed to by any other party.
This legislation also empowers BF&R to create a formal settlement process, which will allow more tax disputes to be resolved without a final Board decision – thus reducing litigation costs for taxpayers. Under current law, BF&R has no authority to direct a settlement process.
BF&R receives approximately 4,200 appeals annually. The Board must resolve each appeal within six months of its filing; otherwise, the underlying DOR decision is upheld. Currently, only about 13% of eligible appeals are resolved through settlement prior to an appeal before the Commonwealth Court.
BF&R is an independent administrative tax tribunal responsible for the second and final level of administrative appeal (with minor exceptions) before appealing to court. The Board consists of three members – two are appointed by the Governor and confirmed by the Pennsylvania Senate; the third is the State Treasurer or her designee and serves as Chair.
STACY GARRITY, STATE TREASURER
Information provided to TVL by:
Emily Hildebrand
