Q&A with the Pennsylvania Department of Revenue

How does the Board of Appeals determine whether to abate a penalty under 72 Pa.C.S. § 9706?

Jan 12, 2018
This section provides that penalty may be waived if the petitioner acts in good faith, without the intent to defraud the Commonwealth and without negligence:

The Board will generally review the petitioner’s filing history for a certain period of time (dependent on the tax) to determine if penalty should be abated. If the petitioner has a good filing history for that time, then penalty will generally be abated. For the trust fund taxes, the look back period is prior 12 months. For Personal Income Tax and Corporate taxes, the look back period is three years. If it is a sales and use tax audit assessment, the Board will generally abate penalty if this is the first audit and there is no failure to remit collected tax. If it is a subsequent sales and use tax audit, the Board will review whether there has been improvement in the areas of deficiency in the first audit. The Board may also not abate penalty in an audit assessment if the taxpayer did not provide records or did not cooperate with the auditor. Please be aware that these are merely general guidelines used by the Board when reviewing penalty abatement. There may be some exceptions to these guidelines based upon the facts and circumstances of a particular appeal.

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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.