Pennsylvania Act 2002-87 — TAXPAYERS' BILL OF RIGHTS - AMEND INNOCENT SPOUSE RELIEF

Act text

TAXPAYERS' BILL OF RIGHTS - AMEND INNOCENT SPOUSE RELIEF
                  Act of Jun. 28, 2002, P.L. 522, No. 87              Cl. 72
                             Session of 2002
                               No. 2002-87

     SB 33

                                  AN ACT

     Amending the act of December 20, 1996 (P.L.1504, No.195),
        entitled, as reenacted and amended, "An act providing for the
        rights and privileges of taxpayers, for designation of a
        taxpayers' rights advocate and for the powers, duties and
        responsibilities of the Department of Revenue and the
        Taxpayers' Rights Advocate," further providing for innocent
        spouse relief.

        The General Assembly of the Commonwealth of Pennsylvania
     hereby enacts as follows:

        Section 1.  Section 212 of the act of December 20, 1996
     (P.L.1504, No.195), known as the Taxpayers' Bill of Rights,
     reenacted and amended June 22, 2001 (P.L.595, No.47), is amended
     to read:
      Section 212.  Innocent spouse relief.
        [Under regulations promulgated by the secretary, a taxpayer
     filing a joint return under Article III of the act of March 4,
     1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, for a
     taxable year shall be relieved of liability for tax, interest
     and penalties for that taxable year to the extent such liability
     is attributable to a substantial understatement by the
     taxpayer's spouse. This section shall apply only if:
            (1)  On such joint return there is a substantial
        understatement of tax attributable to grossly erroneous items
        of one spouse.
            (2)  The other spouse establishes that in signing the
        return such spouse did not know and had no reason to know
        that there was such substantial understatement.
            (3)  Taking into account all the facts and circumstances,
        it is inequitable to hold the other spouse liable for any
        assessment for such taxable year attributable to such
        substantial understatement.]
        (a)  General rule.--A taxpayer who has made a joint return
     may elect to seek relief from liability in the circumstances
     described in subsection 6015(b) or (c) of the Internal Revenue
     Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.). The
     election under this subsection shall be filed with the
     Taxpayers' Rights Advocate.
        (b)  Prompt action.--The Taxpayers' Rights Advocate, within
     six months of receiving an election under this section, shall
     dispose of the election. If, taking into account all the facts
     and circumstances, it is inequitable to hold the taxpayer liable
     for any unpaid tax or any deficiency and relief is not otherwise
     available to the taxpayer, the Taxpayers' Rights Advocate may
     relieve the individual of the liability. Prompt notice of the
     action taken shall be given to the taxpayer. A denial of an
     election or a failure to notify the taxpayer of a decision
     within six months after the date an election is filed with the
     Taxpayers' Rights Advocate may be appealed in the manner
     provided by law for appeals from actions taken on a petition for
     reassessment.
        (c)  Notice.--The department and the Board of Finance and
     Revenue shall provide a taxpayer who has filed a joint return
     but who does not elect to proceed under this section with
     adequate notice and an opportunity to become a party to a
     proceeding under this section.
        (d)  Regulations.--The department and the Board of Finance
     and Revenue shall promulgate regulations necessary to implement
     this section.
        Section 2.  This act shall take effect immediately.

     APPROVED--The 28th day of June, A. D. 2002.

     MARK S. SCHWEIKER