61 Pa. Code § 35.2 - Interest, additions, penalties, crimes and offenses

(a) Interest. Interest shall be imposed in conformance with the following:

(1) Rate. Effective January 1, 1982, the annual rate of interest imposed on tax due the Commonwealth is established by section 806 of the FC (72 P. S. § 806). See 61 Pa. Code §§ 4.1-4.11 (relating to interest).

(2) Late payment. If an amount of tax imposed by the TRC is not paid on or before the last date prescribed for payment, interest shall be paid under section 806 of the FC. The last date prescribed for payment shall be determined under § 34.3 (relating to tax returns) without regard to an extension of time for payment. In the case of an amount assessed as a deficiency or as an estimated assessment, the date prescribed for payment shall be 30 days after notice of the assessment.

(3) Assessment. If the Department assesses a tax, there shall be added to the amount of the deficiency interest, calculated under section 806 of the FC, for each month or fraction thereof from the date payment of the tax was due to the date of notice of the assessment.

(b) Additions. Additions shall be imposed in conformance with the following:

(1) Failure to file return. In the case of failure to file a return required on the date prescribed therefor, determined with regard to an extension of time for filing, there shall be added to the amount of tax actually due 5.0 % of the amount of such tax if the failure to file a proper return is for not more than 1 month, with an additional 5.0 % for an additional month or fraction thereof during which the failure continues, not exceeding 25% in the aggregate. In every case, at least $2.00 shall be added.

(2) Underpayment of tax. If a return filed with the Department shows a greater tax due or collected than the amount of tax remitted with the return, the Department will issue an assessment for the difference, together with an addition of 3.0 % of the difference, which shall be paid to the Department within 10 days after a notice of the assessment has been mailed to the taxpayer. If the assessment is not paid within 10 days, there shall be added thereto, and paid to the Department, an additional 3.0 % of the difference for each month thereof during which the assessment remains unpaid, but the total of all these additions may not exceed 18% of the difference shown on the assessment.

(3) Understatement of tax. If a return filed with the Department understates the amount of tax due, there shall be added to the assessment an addition of 5.0 % of the understatement. Where the understatement is in excess of 50% there shall be added to the foregoing 5.0 % addition, a further 5.0 % of the understatement for each month or fraction thereof that the understatement is outstanding. This further addition may not exceed 25% of the understatement.

(4) Uncollectible checks. Whenever a check issued in payment of a tax or for another purpose is returned to the Department as uncollectible, to cover the cost of its collection a fee of 10% of the face amount thereof, plus protest fees, will be charged to the person presenting the check to the Department. The additions imposed hereby may not exceed $200 nor be less than $10. The additions shall be added to interest, additions or penalties otherwise due under the TRC.

(c) Penalties. Intentional failure on the part of a party to a transaction whether as vendor, purchaser or user to pay, collect or remit to the Department the full tax due under this article may subject the taxpayer to a 50% penalty unless the taxpayer makes a full, accurate and complete good faith disclosure of the occurrence of the transaction. The disclosure shall be made to the Department as an addition to the return for the period during which the transaction occurred. In addition, a person who willfully attempts in any manner to advise or assist a taxpayer to evade or defeat the tax shall be liable for the 50% penalty. An act or omission which occurs after a person has knowledge that an act or omission is not in conformity with this article is presumed to be an intentional act or omission. The presumption exists that every taxpayer is familiar with the provisions of the Code and regulations and rulings. Where an issue of fact is raised in a proceeding for reassessment or refund with respect to whether a return is fraudulent, the burden of proof with respect to an issue is on the Department.

(d) Crimes and offenses. The following shall constitute crimes and offenses:

(1) Crimes under the TRC. Crimes under the TRC are as follows:

(i) Fraudulent return. Any person who, with intent to defraud the Commonwealth, shall willfully make or cause to be made a false return shall be guilty of a misdemeanor and upon conviction thereof, shall be sentenced to pay a fine not exceeding $2,000 or undergo imprisonment not exceeding 3 years, or both.

(ii) Misdemeanor. A fine not exceeding $1,000 or imprisonment not exceeding one year, or both, may be imposed upon conviction of any of the following:

(A) A person who advertises or holds out to the public that the tax will be absorbed by the person, not added to the purchase price or, if added, refunded other than when the property is returned to the vendor.

(B) A person who willfully fails or refuses to collect and remit the tax to the Department.

(C) A person who willfully fails, neglects or refuses to file a return or report required to be filed.

(D) A taxpayer who refuses to pay any tax, interest, additions or penalties imposed.

(E) A taxpayer who willfully fails to preserve his books, papers and records as directed by the Department.

(F) A person who refuses to permit the Department or its agents to examine his books, records or papers.

(G) A person who knowingly makes an incomplete, false or fraudulent return or report.

(H) A person who does anything to prevent the full disclosure of the amount or character of taxable sales, purchases or use of the property.

(I) A person who provides a person with a false statement as to the payment of the tax.

(J) A person who makes or issues a false or fraudulent exemption certificate.

(iii) Summary offense. A fine of not less than $100 nor more than $300, and in default thereof, imprisonment of not less than 5 days nor more than 30 days, shall be imposed upon conviction of: a person who maintains a place of business in this Commonwealth for the purpose of selling or leasing services or tangible personal property, the sale or use of which is subject to tax, without having first been licensed by the Department.

(2) Crimes under the Penal and Crimes Code. Crimes under the Penal and Crimes Code (18 P. S. § 4823) shall be as follows:

(i) Embezzlement-In addition to the offenses already set forth in this subsection, any person who, on or before June 5, 1973, collected and converted or misappropriated the tax may be guilty of embezzlement under the provisions of the Penal Code of 1939 (18 P. S. § 4823). Reference should be made to Commonwealth v. Shafer, 414 Pa. 613 (1964).

(ii) Misapplication of entrusted property and property of Government or financial institutions. In addition to the offenses already set forth in this subsection, any person who, on or after June 6, 1973, collects and converts or misappropriates the tax may be guilty of misapplication of entrusted property and property of government or financial institutions under the provisions of 18 Pa.C.S. § 4113 (relating to misapplication of entrusted property and property of government or financial institutions).

(iii) Theft. In addition to the offenses already set forth in this subsection, any person who, on or after June 6, 1973, collects and converts or misappropriates the tax may be guilty of theft under the provisions of 18 Pa.C.S. §§ 3921 or 3927 (relating to theft by unlawful taking or disposition; and theft by failure to make required disposition of funds required).

Notes

61 Pa. Code § 35.2

The provisions of this § 35.2 amended August 20, 1976, effective 8/21/1976, 6 Pa.B. 1988; amended April 24, 1987, effective 4/25/1987, 17 Pa.B. 1665.

The provisions of this § 35.2 amended under sections 248.2 and 270 of the Tax Reform Code of 1971 (72 P. S. §§ 7248.2 and 7270).

This section cited in 61 Pa. Code § 35.1 (relating to tax examinations and assessments); and 61 Pa. Code § 46.7 (relating to nonresident contractors).