Q&A with the Pennsylvania Department of Revenue

Scenario: Applying the add-back provision

Dec 13, 2016

Earlier this year the Department released Information Notice Corporation Taxes 2016-1 providing guidance on the add-back provision that disallows deductions for certain transactions among affiliated members. PICPA and other organizations have commented that the proposed application of the add-back provision as set forth in the Notice appears to be overly broad based on our practitioners’ understanding of the intent and wording of the statute. Does the Department intend to provide amended or additional guidance on this issue? Is a regulatory project being considered?


The Department is contemplating its next action with regard to the add back. Additional guidance may be provided after the Department has time to identify and evaluate issues that arise in administering filed reports and compliance with the add-back provision.

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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.