Corporate Tax Q&A with Pennsylvania Department of Revenue

PICPA

Q&A with Pennsylvania Department of Revenue

Corporate Tax

Scenario: A federal bonus depreciation adjustment was partially disallowed for a prior year during an IRS audit of a corporation
Scenario: A return is filed prior to the due date (or prior to the extended due date) and a mistake is discovered
If a corporation having unrecovered bonus depreciation for CNIT purposes merges or liquidates into a bank subject to Bank Shares Tax, what happens to the corporation’s remaining unrecovered bonus balance?
Scenario: Transaction involving a consumer or recipient who is different than the paying customer
Have there been any internal discussions surrounding the proposed Section 385 regulations and how they may apply to a separate filing jurisdiction such as Pennsylvania? If the regulations are passed, would the Department provide formal guidance?
Scenario: Apportioning a taxable loss to Pa.
Scenario: Interest received from a partnership in a corporation’s sales factor
In determining a corporation’s sales factor, is it acceptable to use PJM’s ISO load factor as a means of sourcing receipts to Pa. from spot sales of electricity on the PJM network? The BF&R granted PSEG Energy Resources & Trade LLC relief on the issue.
Scenario: Corporation recently learned that it was subject to a CNI tax in 2013 and 2014
Scenario: Clients receiving Notice of Assessments after PA processed their returns
With respect to Corporate Net Income and Personal Income taxes, does the Department follow the Operational Approach or the Transactional Approach, and how granular is the DOR’s analysis?
With respect to Corporate Net Income Tax, does the DOR consider the provision of software in the “Cloud” a sale of TPP for CNIT purposes?
With respect to Corporate Net Income Tax, will the DOR be issuing further guidance of what constitutes a “valid business purpose” when applying the DHC Add-Back Exception?
With respect to Corporate Net Income Tax, is the Department pursuing “Nexus Audits” of Delaware Holding Companies?
For Capital Stock and Franchise Tax purposes, what is considered sufficient detail and support when the adjustment is NOT book income?
Senario: Penalities for the late filing of a Report of Change
What is the DOR's policy with respect to processing amended corporate tax reports?
Does the DOR still believe that the merger of a subsidiary into its parent company constitute a liquidating dividend for capital stock/franchise tax purposes?
What factors are considered when auditing and assessing tax on intercompany transactions with holding companies?
Does the Department plan to release guidance on the addback of intangible and interest expenses and costs, and exceptions thereto, as enacted by Act 52? If so, when and in what format?

Pennsylvania Institute Of Certified Public Accountants

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