PA Tax Law News -- December 2013: Board of Finance and Revenue Changes Awaited

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As this issue went to press we awaited official announcement of the Governor’s two nominees, and the State Treasurer’s designee, to the Board of Finance and Revenue. The Board was reconstituted by Act 52 of 2013 (see article in July 2013 issue of this newsletter for extensive discussion). At this writing, it was unclear whether the Governor’s nominees would be confirmed before year-end, and begin their work reconstituting the Board on January 1st, or if they will be confirmed after the first of the year. In any event, the new members will begin hearing cases on April 1st and the old Board will continue to hear cases through March.

In the meantime, an ad hoc committee of which I am a member, representing the Pennsylvania Chamber and PICPA, has been reviewing draft regulations prepared by the Treasury Department for new procedures at the Board. These draft regulations are still in a state of flux and, in any event, will be subject to review, revision and formal adoption by the newly-constituted Board, when it is assembled. At that point, proposed regulations also will have to undergo the formal regulatory review process, which usually takes several months. In the interim, the Board likely will operate under temporary or informally-adopted procedures. To some extent, Act 52, by itself, mandates certain procedures - providing for participation by the Department of Revenue as a party, prohibiting ex parte communications, allowing for examination and cross-examination of witnesses, providing for publication of decisions, etc.

In general terms, we are urging that procedures before the reconstituted Board not be made unnecessarily complicated so that the historical informality and easily navigated process can be retained to the extent possible, in combination with the newly independent decision-making authority and increased transparency enacted in Act 52. The Board handles thousands of cases, including both small and large dollar disputes, in which some taxpayers are self-represented. We, of course, will be prepared to aggressively and cost-effectively represent our clients no matter what procedures are adopted. However, we believe the process should remain accessible and not be made so expensive to navigate that some taxpayers may effectively be precluded from participation.