The bill amends the Tax Reform Code of 1971 by introducing a new section, Section 252.1, which establishes penalties for frivolous refund claims filed by taxpayers. Under this new provision, if a taxpayer submits a claim for a tax refund that is found to be materially incomplete, duplicative, or lacking a reasonable basis in law or fact, they may incur penalties of five percent or ten percent of the claimed refund amount, respectively. The bill outlines specific conditions under which a claim may be deemed frivolous, including failure to provide necessary documentation or proof of tax payment.

Additionally, the bill mandates that the Department of Revenue notify taxpayers of any incomplete claims before assessing penalties, allowing them a sixty-day period to correct the omissions. It also provides the department with the discretion to waive penalties under certain circumstances, such as if the duplicate claim was unintentional. The penalties apply only to claims totaling $5,000 or more, and if a claim is prepared by someone other than the taxpayer, the penalty will be imposed on that individual instead. The act is set to take effect immediately upon passage.

Statutes/Laws affected:
Printer's No. 1856 (Jun 09, 2025): P.L.6, No.2