Q&A with the Pennsylvania Department of Revenue

Based on Act 72 of 2013, is there a way to verify that a file for inactive status was properly processed by the state?

Sep 30, 2013
Q:

Act 72 of 2013 created a minimum $500 non-filing penalty for C corporations for tax years beginning after Jan. 1, 2014. Will there be a way to determine if a C corporation that is no longer active is properly recognized as inactive by revenue? For example: if we file for inactive status with the state is there a way to verify that it was properly processed by the state? Also, if a taxpayer chooses to re-activate a formerly inactive corporation after a period of inactivity will this new law impact them?

A:

The term "inactive" refers to a corporation that has discontinued all activity and disposed of all assets but remains on the active records of the Bureau of Corporation Taxes. These corporations are required to file a Corporate Tax Report, normally the RCT-101I, each year. In that case the $500 penalty would apply if the report is filed late, even though there was no activity. A corporation removed from the active records of the Bureau of Corporation Taxes is not required to file reports for periods after the account is closed. If the corporation chooses to reinstate their Corporation Tax Account the penalty will not be imposed for the periods during which the account was closed.

Currently the Bureau of Compliance sends a letter to a corporation requesting to be removed from the active records of the Bureau of Corporation Taxes but not dissolving or withdrawing with the PA Department of State. This letter is sent once the corporation is removed from the active records and states no further reports are required. If your client does not have this letter verification of the status of the taxpayer can be obtained by sending a written request to:

PA Department of Revenue
Bureau of Compliance
P.O. Box 280947
Harrisburg, PA  17128-0947

This request must contain the name and address of the corporation along with the Revenue ID and must be signed by an officer of the corporation.

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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.