HB 1552 — An Act amending the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, in sales and use tax, providing for frivolous refund claim.

Summary

Streamlining BOA Tax Appeals

Bill Text

• Printer's No. 1856 View text Current

AI-generated reading aid from the bill's amendatory text — verify against the official bill.

This bill establishes penalties for frivolous tax refund claims under Pennsylvania's Tax Reform Code.

• Section 252.1

  Frivolous Refund Claim.--(a) If a taxpayer files a claim for refund of tax paid under this article as described in subsection (b), the department shall assess and collect, in addition to other penalties provided by law, a penalty as follows: (1) Five per centum of the amount of the refund claim if the claim is found to be materially incomplete. (2) Ten per centum of the amount of the refund claim that is found to be duplicative or lacking a reasonable basis in law or in fact. (b) A claim for refund is subject to the penalty under this section if: (1) the claim is incomplete; (2) the claim includes a purchase for which an earlier claim for refund has already been filed; (3) the claim, or any part of it, lacks a reasonable basis in law or in fact; or (4) the taxpayer fails to provide the department with proof the tax for which a refund is claimed was actually paid. (c) (1) A claim for refund is incomplete if it does not include the form and substantially all of the pertinent data, information and documentation required by section 2703 and the department's regulations. (2) Prior to assessing a penalty for a claim for refund due to incompleteness under subsection (b)(1), the department shall notify the taxpayer or the preparer of the claim that the claim appears to be incomplete. The notification shall specify the pertinent data, information and documentation that appears to be missing and shall state that failure to either correct the omission or withdraw the claim for refund within sixty days of the date of the notice, plus any additional time allowed by the department for reasonable cause shown, will result in the assessment and collection of the penalty under subsection (b). Correcting the omission shall require the taxpayer or preparer of the claim to provide the missing data, information and documentation and to demonstrate why the claim is not incomplete. (d) If an application for refund is identified at the time of filing as a protective claim filed in order to preserve the right to a refund prior to the expiration of the statute of limitations, the department shall determine if the claim for refund is subject to the penalty under this section after the claim for refund is perfected. (e) The department may waive the penalty imposed by this section if the person against whom the penalty is assessed: (1) establishes that a duplicate claim was not intentional and was either minimal or immaterial; or (2) demonstrates other good cause for waiver of the penalty. (f) The penalty imposed by this subsection applies only to claims totaling five thousand dollars ($5,000) or more. (g) The department shall assess and collect the penalty imposed by this section from the taxpayer unless the claim for refund is prepared, in whole or in part, by a person other than the taxpayer, in which case the penalty shall be imposed on that person. The penalty imposed by this section shall be assessed and collected in the manner provided for in Chapter IV.

  This adds a new section that imposes specific penalties for frivolous refund claims, including conditions under which penalties are applied and the process for notification and waiver.

Action History

1. September 10, 2025

   Laid on the table, Sept. 10, 2025

2. September 10, 2025

   Re-reported as committed, Sept. 10, 2025

3. June 11, 2025

   Re-committed to RULES, June 11, 2025

4. June 11, 2025

   First consideration, June 11, 2025

5. June 11, 2025

   Reported as committed, June 11, 2025

6. June 09, 2025

   Referred to FINANCE, June 9, 2025

Sponsors

• Joshua Siegel · Primary
• G. Roni Green · Cosponsor

Subjects