We provide here a written summary of answers provided by the Department of Revenue to the committee at periodic question and answer sessions. 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 a specific fact situation may request a written letter ruling under 61 Pa. Code Section 3.3.
Q&A with the Pennsylvania Department of Revenue
Scenario: Clients receiving Notice of Assessments after PA processed their returns
A number of our clients recently received Notice of Assessments after PA processed their returns. The things that these clients have in common are that they are C-Corporations with fiscal-year ends and bonus depreciation and/or NOL's were reported on the originally filed returns. PA is disregarding the bonus depreciation and/or NOL reported and assessing tax and penalties. We dealt with this issue previously and in discussing with the Department came to find out it was a problem on their end attributable to technology upgrades. The issue was so commonplace that they setup a dedicated email address that could be used to address and resolve the issue. Today I am told that the only recourse is to appeal the assessment.
Is this a systemic issue? Can practitioners still utilize the resource account that was previously established to address this issue?
These assessment notices are being caused, primarily, by data conversion issues dating back to when the ITS went live for Corporation Taxes. As we continue to process returns, we are continuing to clean up this converted data. The taxpayers and practitioners can still utilize the resource account as a mechanism to point out these errors and have NOLs and bonus depreciation corrected.