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

What is the Board of Appeals' policy of refusing to grant relief in cases that involve the application of the net loss fixed dollar limitation for tax years after 2006? The R.B. Alden and General Motors cases involve pre-2007 tax years.

Nov 15, 2019
The PA Supreme Court held the fixed dollar net operating loss deduction (flat dollar
cap) unconstitutional in the Nextel decision issued on Oct. 18, 2017. The Supreme Court, however, did not address whether this decision should be applied retroactively. The Commonwealth Court recently heard arguments regarding this issue in the RB Alden and General Motor cases. The law, therefore, in this area is not settled. As the Board of Appeals can only issue decisions "in accordance with the law," the Board has been providing taxpayers with two options.

The first option is to hold their case in pending litigation behind the RB Alden case and the second option is to issue a failure to act letter. The failure to act letter provides the taxpayer with the opportunity to appeal the issue to the Board of
Finance and Revenue which can issue a decision in accordance with the law and equity. The decisions issued by the Board of Finance and Revenue regarding this issue are available on their web site. 
 

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Disclaimer

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.