Philadelphia, July 6, 2010 – With more than $40 million for the City plus more than $20 million for the School District collected after expenses, Philadelphia’s first tax amnesty program in over two decades exceeded expectations. Original collection estimates by the Department of Revenue ranged from $25-$30 million. Overall, more than 27,000 tax delinquents embraced the opportunity to make good with the City by applying for tax amnesty.
Launched on May 3 and ending on June 25, 2010, Philadelphia Tax amnesty allowed those delinquents who participated in and qualified for the program to have all of their tax penalties waived, as well as pay only half the interest owed. For those who did not participate, the City of Philadelphia is emphasizing they will aggressively pursue remaining tax delinquents and enforce the maximum penalties.
“First and foremost, the City of Philadelphia thanks all of the responsible citizens who have been diligent in paying their taxes on time, as well as those who stepped up to do the right thing by participating in Tax Amnesty. We are very pleased with the level of participation, and that so many came together for the common good by participating in the program,” said Mayor Michael A. Nutter. “Unfortunately, not everyone chose to take advantage of this opportunity, and the City has already begun to crack down on remaining tax delinquents. We will continue to identify and bring into compliance those who still owe the City. These individuals and businesses will face swift legal action as well as stiff fines and penalties on top of what they already owe.”
“We were very pleased to see that so many people took the few simple steps required to participate in Philadelphia Tax Amnesty,” said Keith J. Richardson, M.B.A., Commissioner of the City of Philadelphia Department of Revenue. “From the start our goal was to make as many people as possible aware of the opportunity, and then encourage them to take action by providing a very high level of support via our website, hotline and in-person assistance.”
Commissioner Richardson offered the following statistics on Philadelphia Tax Amnesty applications and methods of processing:
Completed applications: 27,473
Website hits: 83,163
Inbound calls from taxpayers: 98,811
Outbound calls to taxpayers: 326,825
Walk-in Center visitors: 7,588
To enforce compliance among those who did not participate and settle up on back taxes before the end of the amnesty period, as well as identify businesses and individuals who should be—but are not—registered with the City and paying taxes, the City is taking action in a number of ways, including:
New Post-Amnesty Enforcement Efforts
- Criminal Prosecution – Failure to turn over trust fund taxes (including: Wage, Liquor, and Parking) collected on behalf of the City and School District is considered theft under state law. These cases will be referred to the District Attorney’s Office for potential prosecution and can result in up to 7 years imprisonment.
- Tripling the Number of Properties Sent to Sheriff Sale – The City will increase the number of properties sent to sheriff sale from 200 to 600 per month. Properties will get sent to sale earlier; property owners won’t fall so far behind that they cannot catch up.
- Revocation of Business Licenses – The Department of Licenses & Inspections can revoke business licenses, forcing businesses to cease operations.
- Greater Scrutiny on Tax Debt Negotiation – The City’s Law and Revenue Departments have historically been open to negotiating with taxpayers seeking to resolve their past debts and fines for failure to file tax returns. Following amnesty, any request for waiver of interest, penalty or fines, particularly for taxpayers that could have come forward during amnesty and chose not to, will receive significantly higher levels of scrutiny.
Expanded Enforcement Efforts
- Intense Collection Efforts – The City will begin calling delinquents as soon as a payment is missed. More accounts will be sent more quickly to outside collection firms for further enforcement action.
- Focus on the Top Tax Deadbeats – The City will continue to publish the names of the biggest debtors on a new enforcement website and will implement a targeted strategy to collect from them.
- Increased Audits & Investigations – The City is adding staff and information resources to enhance its ability to track down those who should be paying but is not.
- Vendor Compliance Program – The City has launched a program whereby other governments and quasi-government agencies, such as the Philadelphia Parking Authority, School District and PGW, will seek tax clearances for any vendors they use.
- Employee Indebtedness Program – The Department of Revenue, in partnership with the Office of the City Controller, has overseen a program to bring City employees into compliance. Those employees who do not pay their outstanding debts in full or through payment agreements will be subject to involuntary payroll deductions. The City will also require that new hires to government positions and appointees to boards and commissions be tax compliant.
Mayor Nutter added, “In some instances, failure to remit taxes is not just a shirking of a civic obligation resulting in monetary penalties; it’s a crime, and we will prosecute. From the beginning of Tax Amnesty, the City made it clear that when time ran out on the amnesty period, so did the idea that people could get away without being penalized to the fullest extent. That time has come. Cases are already being turned over to the D.A.’s office for potential prosecution and may carry criminal penalties.”
Now that time has “run out” on Philadelphia Tax Amnesty, the City is also continuing to take steps to help enhance filing and payment options.
“Equally as important as collecting back taxes owed to the City of Philadelphia is putting in place the procedures and laws that will cut down on the number of tax delinquents moving forward,” said Mayor Nutter. “Mandatory e-filing and e-payment, and aggressive pursuit of delinquents as well as increased pursuit of non-registered businesses inside and outside of Philadelphia are just a few examples of our aggressive response to tax delinquency.”
Further details on filing and paying Philadelphia taxes is available at http://www.phila.gov/revenue, or by calling
215-686-6442 (Real Estate taxes), 215-686-6600 (all other taxes).
Contacts: Joanna Ford Adam Leiter
215-875-4362 215-875-4363
Cell: 215-534-5373 Cell: 856-237-5534
