Small business group alarmed over proposed overdue tax raid on bank accounts

The National Federation of Independent Business on Wednesday decried a proposal that would allow the Pennsylvania Department of Revenue to require state banks to identify accounts owned by businesses that have more than $1,000 in overdue taxes and to garnish those funds.

“This is a dangerous proposal by the state’s tax collectors because innocent businesses could have their funds disappear from their bank account without sufficient due process,” Gordon Denlinger, state director of NFIB in Pennsylvania, said in a news release.

Under the proposal, the only required notice is a first class notice sent to the business’s last known address five days after the bank is notified to freeze an account, Denlinger said. "The current proposal doesn’t even require a court order, just some notification letters that could easily go to the wrong business address if the company moved,” he said.

The revenue department did not respond to a request for comment. It could not be determined what bill in the House of Representatives would be the vehicle for the proposal.

Read more: https://www.inquirer.com/business/pennsylvania-tax-seizure-proposal-alarms-small-business-group-20190619.html

While there is a possibility that it could ensnare an innocent business, it's far more likely that it will catch businesses that failed to pay their taxes despite repeated attempts by the Department of Revenue to collect the tax debts.