PRIOR PRINTER'S NOS. 31, 207 PRINTER'S NO. 655
No. 33 Session of 2001
INTRODUCED BY DENT, EARLL, BELL, WENGER, TOMLINSON, THOMPSON,
ROBBINS, TARTAGLIONE, WAGNER, STOUT, COSTA, WAUGH, RHOADES,
MUSTO, BOSCOLA, SCHWARTZ AND KASUNIC, JANUARY 22, 2001
AS AMENDED ON THIRD CONSIDERATION, MARCH 12, 2001
AN ACT
1 Reenacting and amending the act of December 20, 1996 (P.L.1504,
2 No.195), entitled "An act providing for the rights and
3 privileges of taxpayers," providing for a report to the
4 General Assembly; and eliminating the expiration date of the
5 act.
6 The General Assembly of the Commonwealth of Pennsylvania
7 hereby enacts as follows:
8 Section 1. The title and the act of December 20, 1996
9 (P.L.1504, No.195), known as the Taxpayers' Bill of Rights, are
10 reenacted and amended to read:
11 AN ACT
12 Providing for the rights and privileges of taxpayers, FOR <--
13 DESIGNATION OF A TAXPAYERS' RIGHTS ADVOCATE AND FOR THE
14 POWERS, DUTIES AND RESPONSIBILITIES OF THE DEPARTMENT OF
15 REVENUE AND THE TAXPAYERS' RIGHTS ADVOCATE.
16 TABLE OF CONTENTS
17 Chapter 1. General Provisions
18 Section 101. Short title.
19 Section 102. Legislative intent.
1 Section 103. Definitions.
2 Chapter 2. Taxpayers' Rights
3 Section 201. Application.
4 Section 202. Disclosure statement of rights of taxpayers.
5 Section 203. Procedures involving taxpayer interviews.
6 Section 204. Abatement of certain interest, penalties and
7 additions to tax.
8 Section 205. Installment agreements.
9 Section 206. Basis for evaluating department employees.
10 Section 207. Taxpayers' Rights Advocate.
11 Section 208. Taxpayer assistance orders.
12 Section 209. Application of payments.
13 Section 210. Decisions of Board of Finance and Revenue and
14 Department of Revenue.
15 Section 211. Authority to remove lien.
16 Chapter 3. [Interdepartmental Documents] <--
17 INTRADEPARTMENTAL DOCUMENTS; REPORTS <--
18 Section 301. Rules and regulations.
19 Section 302. Technical memoranda.
20 Section 303. Advisory opinions.
21 Section 304. Report to General Assembly.
22 Chapter 4. Miscellaneous Provisions
23 [Section 401. Expiration.]
24 Section 402. Effective date.
25 CHAPTER 1
26 GENERAL PROVISIONS
27 Section 101. Short title.
28 This act shall be known and may be cited as the Taxpayers'
29 Bill of Rights.
30 Section 102. Legislative intent.
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1 It is the intent of the General Assembly to provide equitable
2 and uniform procedures for the operation of the Department of
3 Revenue and for all taxpayers when dealing with the department.
4 In order to ensure the equitable administration of the tax law,
5 the relative rights and responsibilities of citizens and of
6 their State government should be clearly set forth and adhered
7 to. This act is intended as a minimum procedural code, and the
8 Department of Revenue may adopt or grant additional procedures
9 not inconsistent with this act.
10 Section 103. Definitions.
11 The following words and phrases when used in this act shall
12 have the meanings given to them in this section unless the
13 context clearly indicates otherwise:
14 "Assessment." An assessment, determination, settlement or
15 appraisement of tax liability issued by the Department of
16 Revenue.
17 "Department." The Department of Revenue of the Commonwealth.
18 "Fiscal Code." The act of April 9, 1929 (P.L.343, No.176),
19 known as The Fiscal Code.
20 "Secretary." The Secretary of Revenue of the Commonwealth.
21 "Taxpayer." An individual, partnership, association,
22 society, company, corporation, estate, trust, trustee, receiver,
23 liquidator, fiduciary or other entity subject to or claiming
24 exemption from any tax administered by the Department of Revenue
25 pursuant to the authority of the laws of this Commonwealth or
26 under a duty to perform an act for itself or for another under
27 or pursuant to the authority of such laws.
28 "Voluntary payment." A payment of a tax liability made
29 pursuant to the free will of the taxpayer. The term does not
30 include a payment made as a result of distraint, levy or
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1 pursuant to a legal proceeding in which the Commonwealth is
2 seeking to collect its delinquent taxes or file a claim
3 therefor.
4 CHAPTER 2
5 TAXPAYERS' RIGHTS
6 Section 201. Application.
7 (a) Limited to certain taxes.--Except as otherwise provided,
8 the provisions of this act shall apply to any tax which is
9 administered by the department. Any reference to a tax or taxes
10 includes special assessments, fees and other impositions which
11 are administered by the secretary.
12 (b) Strict compliance unnecessary.--Except to the extent
13 explicitly provided by this act, the failure of the secretary or
14 an officer or employee of the department to comply with any
15 provision of this act shall not:
16 (1) Excuse a taxpayer from payment of any taxes owed by
17 the taxpayer.
18 (2) Excuse any taxpayer from complying with any other
19 duty imposed under or pursuant to the laws of this
20 Commonwealth.
21 (3) Cure any procedural defect in an administrative or
22 judicial proceeding or case involving a taxpayer with respect
23 to taxes owed or compliance with any duty imposed under the
24 laws of this Commonwealth.
25 Section 202. Disclosure statement of rights of taxpayers.
26 (a) Contents.--The secretary shall, not later than 180 days
27 after the effective date of this act, prepare a statement which
28 sets forth the following in simple and nontechnical terms:
29 (1) The rights of a taxpayer and the obligation of the
30 department during an audit.
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1 (2) The procedures by which a taxpayer may appeal or
2 seek review of any adverse decision of the department,
3 including administrative and judicial appeals.
4 (3) The procedure for filing and processing refund
5 claims and taxpayer complaints.
6 (4) The procedures which the department may use in
7 enforcing taxes.
8 (b) Distribution.--The statements prepared in accordance
9 with this section shall be distributed by the secretary to all
10 taxpayers the secretary contacts, other than by providing tax
11 return forms, with respect to the determination or collection of
12 any tax, the cancellation, revocation or suspension of a
13 license, permit or registration or the denial of an application
14 for a license, permit or registration. The secretary may take
15 such actions as the secretary deems necessary to assure that
16 distribution does not result in multiple statements being sent
17 to any one taxpayer.
18 Section 203. Procedures involving taxpayer interviews.
19 (a) Recording of interviews by taxpayer.--Any officer or
20 employee of the department in connection with any in-person
21 interview with any taxpayer relating to the determination or
22 collection of any tax, the cancellation, revocation or
23 suspension of a license, permit or registration or the denial of
24 an application for a license, permit or registration shall, upon
25 advance written request of the taxpayer, make an audio recording
26 of the interview at the taxpayer's own expense and with the
27 department's equipment. The taxpayer may also make an audio
28 recording of the interview with the taxpayer's own equipment if,
29 prior to commencement of the interview, the taxpayer notifies
30 all parties present that the interview will be recorded.
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1 (b) Safeguard.--
2 (1) An officer or employee of the department shall,
3 before or at an initial interview, provide the following to
4 the taxpayer:
5 (i) In the case of an in-person interview with the
6 taxpayer relating to the determination of any tax, an
7 explanation of the audit process and the taxpayer's
8 rights under such process.
9 (ii) In the case of an in-person interview with the
10 taxpayer relating to the collection of any tax, an
11 explanation of the collection process and the taxpayer's
12 rights under such process.
13 (iii) In the case of an in-person interview with the
14 taxpayer relating to the cancellation, revocation or
15 suspension of a license, permit or registration or to the
16 denial of an application for a license, permit or
17 registration, an explanation of the administrative
18 hearing and judicial review processes and the taxpayer's
19 rights under such processes.
20 (2) If the taxpayer clearly informs an officer or
21 employee of the department at any time during an interview,
22 other than an interview initiated by a subpoena, writ or
23 other lawful process, that the taxpayer wishes to consult
24 with an attorney, certified public accountant or any other
25 person permitted to represent the taxpayer, such officer or
26 employee shall suspend the interview regardless of whether
27 the taxpayer may have answered one or more questions.
28 (c) Representative holding power of attorney.--Any attorney,
29 certified public accountant or any other person permitted to
30 represent the taxpayer who is not disbarred or suspended from
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1 practice and who has a written power of attorney executed by the
2 taxpayer may be authorized by the taxpayer to represent the
3 taxpayer in any interview described in subsection (a). An
4 officer or employee of the department may not require a taxpayer
5 to accompany the representative in the absence of a subpoena,
6 writ or other lawful process to examine and inspect the taxpayer
7 or the taxpayer's books, records or other papers. The officer or
8 employee, with the consent of the immediate supervisor of the
9 officer or employee, may notify the taxpayer directly that the
10 officer or employee believes such representative is responsible
11 for unreasonable delay or hindrance of a department examination
12 or investigation of the taxpayer.
13 (d) Nonapplicability to certain investigations.--This
14 section shall not apply to criminal investigations or
15 investigations relating to the integrity of any officer or
16 employee of the department.
17 (e) Scope.--For purposes of this section, any reference to
18 tax shall also include any associated penalty, addition to tax
19 or interest.
20 Section 204. Abatement of certain interest, penalties and
21 additions to tax.
22 (a) Interest attributable to errors and delays by the
23 department.--In the case of any assessment or final
24 determination of interest, the secretary may abate the
25 assessment or final determination of all or any part of interest
26 for any period for the following:
27 (1) Any deficiency or any tax finally determined to be
28 due attributable in whole or in part to any error or delay by
29 an officer or employee of the department acting in his or her
30 official capacity in performing a ministerial act.
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1 (2) Any payment of any tax to the extent that any error
2 or delay in such payment is attributable to such officer or
3 employee being erroneous or dilatory in performing a
4 ministerial act.
5 (b) Error or delay.--For purposes of subsection (a)(1), an
6 error or delay shall be taken into account only if no
7 significant aspect of the error or delay can be attributed to
8 the taxpayer involved and after the department has contacted the
9 taxpayer in writing with respect to the deficiency or tax
10 finally determined to be due or payable. The secretary shall
11 determine what constitutes timely performance of various
12 ministerial acts performed under or pursuant to this act.
13 Administrative and judicial review of abatements under
14 subsection (a) and this subsection shall be limited to review of
15 whether failure to abate would be widely perceived as grossly
16 unfair.
17 (c) Abatement of any penalty or addition to tax or excess
18 interest attributable to erroneous written advice by the
19 department.--
20 (1) The secretary shall abate any portion of any penalty
21 or excess interest attributable to erroneous advice furnished
22 to the taxpayer in writing by an officer or employee of the
23 department, acting in the officer's or employee's official
24 capacity, if:
25 (i) the written advice was reasonably relied upon by
26 the taxpayer and was in response to specific written
27 request of the taxpayer; and
28 (ii) the portion of the penalty or addition to tax
29 or excess interest did not result from a failure by the
30 taxpayer to provide adequate or accurate information.
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1 (2) This subsection shall not be construed to require
2 the department to provide written advice to taxpayers or
3 other persons or entities.
4 Section 205. Installment agreements.
5 (a) Authorization.--The secretary may enter into written
6 agreements with any taxpayer under which the taxpayer is allowed
7 to satisfy liability for payment of any tax and any interest,
8 penalty or addition to tax in installment payments if the
9 secretary determines that the agreement will facilitate
10 collection of the liability.
11 (b) Extent to which agreements remain in effect.--
12 (1) Except as otherwise provided in this subsection, any
13 agreement entered into by the secretary under subsection (a)
14 shall remain in effect for the term of the agreement.
15 (2) The secretary may terminate any prior agreement
16 entered into under subsection (a) if:
17 (i) information which the taxpayer provided to the
18 secretary prior to the date of the agreement was
19 inaccurate or incomplete; or
20 (ii) the secretary believes that collection of any
21 liability to which an agreement under this section
22 relates is in jeopardy.
23 (3) If the secretary finds that the financial condition
24 of the taxpayer has significantly changed, the secretary may
25 alter, modify or terminate the agreement, but only if:
26 (i) notice of the secretary's finding is provided to
27 the taxpayer no later than 30 days prior to the date of
28 such action; and
29 (ii) the notice contains the reasons why the
30 secretary believes a significant change has occurred.
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1 (4) The secretary may alter, modify or terminate an
2 agreement entered into by the secretary under subsection (a)
3 if the taxpayer fails to do any of the following:
4 (i) Pay any installment at the time the installment
5 is due under such agreement.
6 (ii) Pay any other tax liability at the time the
7 liability is due.
8 (iii) Provide a financial condition update as
9 requested by the secretary.
10 (c) Prepayment permitted.--Nothing in this section should be
11 construed to prevent a taxpayer from prepaying in whole or in
12 part any outstanding liability under any agreement the taxpayer
13 enters into with the secretary.
14 Section 206. Basis for evaluating department employees.
15 (a) General rule.--The department shall not use records of
16 tax enforcement results:
17 (1) as the primary criterion to evaluate department
18 officers or employees directly involved in collection
19 activities and their immediate supervisors; or
20 (2) to impose or suggest collection or assessment quotas
21 or goals with respect to department officers or employees
22 described in this subsection.
23 (b) Exceptions.--Forecasts of enforcement results may be
24 made and communicated for planning purposes. Tax enforcement
25 results may be accumulated, tabulated, published and used for
26 management and control of tax administration resources so long
27 as tax enforcement results tabulations are not used as the
28 primary criterion to evaluate an officer or employee described
29 in subsection (a) or to impose or suggest production quotas or
30 goals. In the discharge of a manager's responsibilities, but
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1 subject to the provisions of subsection (a)(1), a manager may
2 raise questions with an officer or employee about the number of
3 cases the officer or employee has processed, the amount of time
4 the officer or employee has been spending on the individual case
5 or the [kind of] results the officer or employee has been <--
6 obtaining.
7 Section 207. Taxpayers' Rights Advocate.
8 The [department] SECRETARY shall designate a Taxpayers' <--
9 Rights Advocate. The Taxpayers' Rights Advocate shall be an
10 employee of the department and shall report directly to the
11 secretary. The Taxpayers' Rights Advocate shall facilitate the
12 resolution of taxpayer complaints and problems in connection
13 with the audit or collection of a tax imposed under Article III
14 of the act of March 4, 1971 (P.L.6, No.2), known as the Tax
15 Reform Code of 1971.
16 Section 208. Taxpayer assistance orders.
17 (a) Authority to issue.--On application filed by a taxpayer
18 with the department Taxpayers' Rights Advocate in the form,
19 manner and time prescribed by the secretary and after thorough
20 investigation, the Taxpayers' Rights Advocate may issue a
21 taxpayer assistance order if, in the determination of the
22 Taxpayers' Rights Advocate, the manner in which the State tax
23 laws are being administered is creating or will create an unjust
24 and inequitable result for the taxpayer. A determination by the
25 Taxpayers' Rights Advocate under this section to issue or to not
26 issue a taxpayer assistance order is final and cannot be
27 appealed to any court.
28 (b) Terms of a taxpayer assistance order.--A taxpayer
29 assistance order may require the department to release property
30 of the taxpayer levied on, cease any action or refrain from
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1 taking any action to enforce the State tax laws against the
2 taxpayer until the issue or issues giving rise to the order have
3 been resolved. The running of the period of limitation for such
4 department action shall be suspended from the date of the
5 taxpayer assistance order until one of the following:
6 (1) The expiration date of the order.
7 (2) If an order is modified, the expiration date of the
8 modification order.
9 (3) If an order is rescinded, the date of the rescission
10 order.
11 (c) Authority to modify or rescind.--A taxpayer assistance
12 order may be modified or rescinded by the secretary.
13 (d) Independent action of Taxpayers' Rights Advocate.--This
14 section shall not prevent the Taxpayers' Rights Advocate from
15 taking action in the absence of an application being filed under
16 subsection (a).
17 Section 209. Application of payments.
18 Unless otherwise specified by the taxpayer, all voluntary
19 payments with respect to any tax period for any tax administered
20 by the department shall be allocated within the taxpayer's
21 account in the following priority:
22 (1) Tax.
23 (2) Addition to tax.
24 (3) Interest.
25 (4) Penalty.
26 (5) Any other fees or charges.
27 Section 210. Decisions of Board of Finance and Revenue and
28 Department of Revenue.
29 (a) Precedent.--Where the Board of Finance and Revenue has
30 issued a decision or an order in favor of a taxpayer and the
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1 Commonwealth has not appealed the decision or order, the
2 department may not make an assessment against the taxpayer that
3 raises an identical or substantially identical issue.
4 (b) Application.--Precedent shall apply to tax periods
5 following the period to which the decision or order of the Board
6 of Finance and Revenue applies. It shall not apply where there
7 has been a change in statute, regulation or material fact
8 applicable to periods following the period to which the decision
9 or order of the Board of Finance and Revenue applies.
10 (c) Decisions of department.--In the case of a tax imposed
11 under Article III of the act of March 4, 1971 (P.L.6, No.2),
12 known as the Tax Reform Code of 1971, the department may not
13 assess a taxpayer with respect to an issue for which the
14 department assessed the same taxpayer in a previous year and the
15 taxpayer prevailed in removing such assessment based upon
16 identical or substantially identical facts.
17 (d) Exception.--Subsections (a) and (c) shall not apply if
18 the department, upon publication of notice, changes its policy
19 with respect to a discretionary issue, provided that any such
20 change in policy shall be effective prospectively only.
21 Section 211. Authority to remove lien.
22 The secretary shall remove the lien on any property and shall
23 promptly notify the property owner that the lien has been
24 removed if any of the following apply:
25 (1) the debt which underlies the lien has been otherwise
26 satisfied;
27 (2) removal of the lien will facilitate the collection
28 of the outstanding debt; or
29 (3) the taxpayer has entered into an agreement under
30 section 205 to satisfy the outstanding debt by means of
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1 installment payments and such agreement provides for the
2 removal of the lien.
3 CHAPTER 3
4 [INTERDEPARTMENTAL DOCUMENTS] INTRADEPARTMENTAL <--
5 DOCUMENTS; REPORTS
6 Section 301. Rules and regulations.
7 The secretary shall make such reasonable rules and
8 regulations, not inconsistent with law, as may be necessary for
9 the exercise of its powers and the performance of its duties
10 under this act, including regulations which shall advise the
11 public of the following:
12 (1) The various methods by which the department
13 communicates tax policy and interpretations to taxpayers, tax
14 practitioners, personnel of the department and the general
15 public.
16 (2) The legal force and effect, precedential value and
17 binding nature of each method of communication.
18 Section 302. Technical memoranda.
19 Technical memoranda issued by the secretary shall be provided
20 to taxpayers and others of existing interpretations of laws and
21 regulations by the department or changes to the statutory or
22 case law of interest to the public. Where and to the extent that
23 an opinion of the legal counsel of the department is deemed to
24 be of sufficient significance and general applicability to a
25 group or group of taxpayers, the opinion shall be likewise
26 provided.
27 Section 303. Advisory opinions.
28 With respect to taxes administered by the secretary, the
29 secretary shall be required to render advisory opinions within
30 90 days of the receipt of a petition for such an opinion. This
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1 period may be extended by the secretary, for good cause shown,
2 for no more than 30 additional days. An advisory opinion shall
3 be rendered to any person subject to a tax or liability under
4 this [chapter] ACT or claiming exemption from a tax or <--
5 liability. In the discretion of the secretary, they may also be
6 rendered to any nontaxpayer, including, but not limited to, a
7 local official, petitioning on behalf of a local jurisdiction or
8 the head of a State agency petitioning on behalf of the agency.
9 Advisory opinions, which shall be published and made available
10 to the public, shall not be binding upon the secretary except
11 with respect to the person to whom such opinion is rendered. A
12 subsequent modification by the secretary of an advisory opinion
13 shall apply prospectively only. A petition for an advisory
14 opinion shall contain a specific set of facts, be submitted in
15 the form prescribed by the secretary and be subject to the rules
16 and regulations as the secretary may promulgate for procedures
17 for submitting such a petition.
18 Section 304. Report to General Assembly.
19 Within 180 days of the effective date of this section, the
20 taxpayer rights advocate, in AFTER consultation with the Board <--
21 of Finance and Revenue, shall send to the General Assembly a
22 report detailing the effect of this Taxpayers' Bill of Rights on
23 the citizens and taxpayers of this Commonwealth. This report is
24 to include any specific recommendations of how the Taxpayers'
25 Bill of Rights should be modified to strengthen taxpayer
26 protections.
27 CHAPTER 4
28 MISCELLANEOUS PROVISIONS
29 [Section 401. Expiration.
30 This act shall expire on December 31, 2000.]
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1 Section 402. Effective date.
2 This act shall take effect in 60 days.
3 Section 2. This act shall be retroactive to January 1, 2001.
4 Section 3. This act shall take effect immediately.
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