Q&A with the Pennsylvania Department of Revenue

Which appeal rights does a corporate taxpayer have if the DOR refuses to accept all the changes reported on an RCT-128C?

Jun 30, 2011
Q:

Which appeal rights does a corporate taxpayer have if the Department of Revenue refuses to accept all the changes reported on an RCT-128C? If the Department concludes that a corporate taxpayer does not have any appeal rights, how is that policy consistent with the Due Process Clauses of the U.S. and Pennsylvania Constitutions, as a corporate taxpayer is required to file an RCT-128C under 72 Pa.C.S. § 7406)?

A:

Section 406(b) of the Tax Reform Code provides:

(b) If, as a result of such final change or correction, a corporation should report any change in the amount of the taxable income of any corporation upon which tax is imposed by this article, the Department shall adjust the corporation's tax on the Department's records to conform to the revised tax as reported and shall credit the taxpayer's account to the extent of any overpayment resulting from the adjustment. The Department shall then have the power, and its duty shall be, to determine and assess the taxpayer's unpaid and unreported liability for tax, interest or penalty due the Commonwealth, or to credit the taxpayer's account.

If the Department assesses the taxpayer pursuant to TRC section 406(b), the taxpayer may petition for reassessment under TRC section 2702.

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These documents provide a summary of the answers provided by the Department of Revenue to the PICPA Committee on State Taxation at its annual question and answer session. These documents are classified as revenue information issued for informational purposes only for the convenience of PICPA members. Pursuant to 61 Pa. Code Section 3.4, these documents should not be relied upon for any purpose or used in tax appeals. Taxpayers requiring a binding opinion on their specific fact situation may request a written letter ruling under 61 Pa. Code Section 3.3.