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PA Bulletin, Doc. No. 10-2361


Title 61—REVENUE


[ 61 PA. CODE CH. 119 ]

Personal Income Tax—Innocent Spouse Relief

[40 Pa.B. 7093]
[Saturday, December 11, 2010]

 The Department of Revenue (Department), under the authority in section 212 of the Taxpayers' Bill of Rights (act) (72 P. S. § 3310-212), regarding innocent spouse relief, adopts § 119.30 (relating to innocent spouse relief).

Purpose of this Final-Form Rulemaking

 This final-form rulemaking clarifies the Department's policy on innocent spouse relief for Pennsylvania Personal Income Tax as enacted under section 212 of the act. In addition, the final-form rulemaking provides clear instructions for taxpayers regarding elections filed with the Taxpayers' Rights Advocate seeking relief from tax liability of Pennsylvania Personal Income Tax.

Explanation of Regulatory Requirements

 Section 119.30 provides uniformity and guidance to this Commonwealth's taxpayers seeking innocent spouse relief under section 207 of the act (72 P. S. § 3310-207). Several examples are included in this new section.

 Subsection (a) contains definitions for ''collection activity,'' ''disqualified asset,'' ''electing spouse,'' ''nonelecting spouse,'' ''rebate,'' ''Taxpayers' Rights Advocate'' and ''understatement.''

 Subsection (b) provides general information on relief from joint and several liability for understated tax and unpaid tax.

 Subsection (c) provides qualifications for relief from liability applicable to joint filers for understatement of tax. In addition, knowledge or reason to know of an understatement and apportionment of relief are explained. This subsection also includes an example.

 Subsection (d) details qualifications for separation of liability relief applicable to taxpayers no longer married or taxpayers legally separated or not living together. Individuals eligible to make elections, elections not valid with respect to certain deficiencies and disqualified asset transfers are explained in this subsection. Several examples are included in this subsection.

 Subsection (e) explains the factors the Taxpayers' Rights Advocate will consider in determining granting unpaid tax relief and relief from liability for a deficiency if relief is unavailable under subsections (c) and (d). In addition, this subsection includes several examples.

 Subsection (f) explains the election procedure and timing of election for requesting innocent spouse relief.

 Subsection (g) explains the Taxpayers' Rights Advocate's procedures for an invalid election, spousal notification, relief determination, notification of relief and appeal rights.

 Subsection (h) explains relief for penalties, interest and other charges. An example is also illustrated.

Affected Parties

 This Commonwealth's taxpayers and tax practitioners may be affected by the final-form rulemaking.

Comment and Response Summary

 Notice of proposed rulemaking was published at 40 Pa.B. 1916 (April 10, 2010). No amendments have been made to the proposed rulemaking.

 The Department has prepared a comment and response document that is available to interested parties by contacting Mary R. Sprunk, Office of Chief Counsel, Department of Revenue, P. O. Box 281061, Harrisburg, PA 17128-1061.

 The Department received comments from one organization, the Pennsylvania Coalition Against Domestic Violence, during the public comment period. Representative Samuel Rohrer, Republican Chairperson of the House Finance Committee submitted a letter to the Independent Regulatory Review Commission (IRRC), dated April 19, 2010, regarding the time frame of the regulation and issues with Department policy. Specific recommendations for revisions to the regulation were not provided by the Republican House Finance Committee. No comments were received by the Senate Finance Committee. IRRC submitted no specific recommendations for the proposed rulemaking. IRRC requested that the Department provide a detailed response to the April 19, 2010, letter submitted by Representative Samuel Rohrer to IRRC.

Fiscal Impact

 The Department has determined that the final-form rulemaking creates no foreseeable revenue impact on the Commonwealth.


 The final-form rulemaking will not create additional paperwork for the public or the Commonwealth.

Effectiveness/Sunset Date

 The final-form rulemaking will become effective upon final publication in the Pennsylvania Bulletin. The regulation is scheduled for review within 5 years of final publication. A sunset date has not been assigned.

Contact Person

 The contact person for an explanation of the final-form rulemaking is Mary R. Sprunk, Office of Chief Counsel, Department of Revenue, P. O. Box 281061, Harrisburg, PA 17128-1061.

Regulatory Review

 Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on March 29, 2010, the Department submitted a copy of the notice of proposed rulemaking, published at 40 Pa.B. 1916, to IRRC and the Chairpersons of the Chairpersons of the House Committee on Finance and the Senate Committee on Finance for review and comment.

 Under section 5(c) of the Regulatory Review Act, IRRC and the House and Senate Committees were provided with copies of the comments received during the public comment period, as well as other documents when requested. In preparing the final-form rulemaking, the Department has considered all comments from IRRC, the House and Senate Committees and the public.

 Under section 5.1(j.2) of the Regulatory Review Act (71 P. S. § 745.5a(j.2)), on October 20, 2010, the final-form rulemaking was deemed approved by the House and Senate Committees. Under section 5.1(e) of the Regulatory Review Act, IRRC met on October 21, 2010, and approved the final-form rulemaking.


 The Department finds that:

 (1) Public notice of intention to amend the regulations has been duly given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202) and the regulations thereunder, 1 Pa. Code §§ 7.1 and 7.2.

 (2) The final-form rulemaking is necessary and appropriate for the administration and enforcement of the authorizing statute.


 The Department, acting under the authorizing statute, orders that:

 (a) The regulations of the Department, 61 Pa. Code Chapter 119, are amended by adding § 119.30 to read as set forth at 40 Pa.B. 1916.

 (b) The Secretary of the Department shall submit this order and 40 Pa.B. 1916 to the Office of General Counsel and the Office of Attorney General for approval as to form and legality as required by law.

 (c) The Secretary of the Department shall certify this order and 40 Pa.B. 1916 and deposit them with the Legislative Reference Bureau as required by law.

 (d) This order shall take effect upon publication in the Pennsylvania Bulletin.


 (Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 40 Pa.B. 6487 (November 6, 2010).)

Fiscal Note: Fiscal Note 15-448 remains valid for the final adoption of the subject regulation.

[Pa.B. Doc. No. 10-2361. Filed for public inspection December 10, 2010, 9:00 a.m.]

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