New law will streamline and improve the process of resolving tax disputes in PA

Harrisburg, PA — Pennsylvania Treasurer Stacy Garrity today applauded Governor Josh Shapiro for signing Senate Bill 1051, pro-taxpayer legislation sponsored by Sen. Scott Hutchinson (R-21) and supported by overwhelming bipartisan majorities in the General Assembly. A companion bill was introduced in the House by Rep. Tim Briggs (D-149).

The new law will streamline and improve the process of resolving tax disputes with the Pennsylvania Department of Revenue (DOR) by allowing the Board of Finance and Revenue (BF&R) to accept late-filed personal income tax appeals in certain circumstances and to create a new independent settlement process for taxpayers as an alternative to the formal and lengthy court appeals process.

“This law will make tax appeals more fair for Pennsylvania families and businesses by removing silly bureaucratic obstacles and implementing a strong settlement process,” Treasurer Garrity said. “I’m grateful to Governor Shapiro for signing this bill into law, and to Senator Hutchinson and Representative Briggs for their hard work to create an even playing field for Pennsylvania taxpayers.”

SB 1051, now Act 123 of 2024, was supported by numerous organizations, including the Pennsylvania Institute of Certified Public Accountants, the Pennsylvania Chamber of Business and Industry, the NFIB, and the Pennsylvania Society of Enrolled Agents.

Act 123, which goes into effect in 90 days, will allow BF&R to accept late-filed personal income tax appeals if cause is shown by the taxpayer. When the new law becomes effective, taxpayers who disagree with a final decision made by DOR involving personal income tax assessments have a 90-day deadline to appeal the decision to BF&R.  It was previously only 60 days. That strict timeline led to cases being dismissed on a technicality rather than being decided on their merits.

On average, of the approximately 4,200 appeals BF&R receives annually, only about 13 percent of eligible appeals are resolved through settlement prior to an appeal being filed before the Commonwealth Court. The new law also empowers BF&R for the first time to direct parties through an independent settlement process, which is intended to facilitate the amicable resolution of more tax disputes, thus reducing litigation costs for taxpayers. Treasury estimates that up to 500 cases annually could be eligible for this new process.

BF&R is an independent administrative tax tribunal, administered by the State Treasurer, 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.

 

Information provided to TVL by:
Samantha Heckel