Internal Revenue Service
Revenue Ruling
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smRev. Rul. 70-633
1970-2 C.B. 43
Sec. 164
IRS Headnote
Real property taxes levied by Allegheny County and the City of Pittsburgh, Pennsylvania, accrue on January 1 of the calendar year for which imposed and are deductible by an accrual method taxpayer in the year of the accrual date and by a cash method taxpayer when paid; I.T. 3413 superseded.
Full Text
Rev. Rul. 70-633 /1/
The purpose of this Revenue Ruling is to update and restate, under the current statute and regulations, the position set forth in I.T. 3414, C.B. 1940-2, 70.
The question presented is whether for Federal income tax purposes the real property taxes imposed by the City of Pittsburgh and by Allegheny County, Pennsylvania, accrue as of January 1st of the calendar year for which the taxes are imposed.
Under the Pennsylvania statutes, there is no uniformly fixed date for the assessment of property. Under Pennsylvania law, Pittsburgh is a city of the second class and Allegheny County is a county of the second class. In cities of the second class, property is subject to dual assessment, one assessment for county purposes and one for city and school purposes.
Section 25941 of Chapter 65, Title 53 of Purdon's Pennsylvania Statutes Annotated, as amended, provides as follows:
Taxes and water-rents, or rates, in cities of the second class, shall be levied and assessed annually, * * * by general ordinance, prior to the first day of December of each year, which shall fix and determine the same for the ensuing fiscal year commencing January first. * * *
Section 25651 of the statutes, as amended, relating to the time of beginning and ending of fiscal years provides as follows:
Hereafter, the fiscal year in cities of the second class shall begin on the first day of January, and end on the thirty-first day of December of each and every year.
Chapter 4, Title 72 of the statutes, as amended, provides:
Sec. 5020-401. Issuing of precepts and return of assessments in triennial years
(a) * * *
(b) In counties of the second class, the precepts to make triennial assessments shall be issued to the appointed assessors by the board for the assessment and revision of taxes at such time as the board may prescribe, and return thereof be made on or before the first Monday of November as provided by existing law relating to the board for the assessment and revision of taxes in said counties * * *
* * * * *
Sec. 5020-431. Issuing of precepts and return of assessments in inter-triennial years
(a) In counties of the second class, the precepts to make assessments in the years between triennial assessments shall be issued to the appointed assessors by the board for the assessment and revision of taxes at such time as the board may prescribe, and return thereof made on or before the first Monday of November as provided by existing law relating to the board for the assessment and revision of taxes in said counties.
The actual making of the assessments in Pittsburgh and in Allegheny County may be extended over the greater part of the year as indicated above. While there is no statutory provision specifying the date as of which Pittsburgh or Allegheny County real property taxes accrue or are assessed, or specifically providing for personal liability for such taxes, the courts of the State have held that the owner of the property is personally liable for such taxes and that liability for the tax attaches to the person owning the property at the time the assessment is levied and the tax is due. Whether that assessment is at the beginning or the middle of the year, the person charged at the time the taxes are assessed is liable for the whole tax. (Theobald v. Sylvester, 27 Pa. Super. Ct., 362.)
In Pennsylvania Company for Insurance on Lives and Granting Annuities v. Bergson (159 Atl., 32) the Superior Court of Pennsylvania said:
* * * It is clear from the principles in these cases and the legislative declarations that the owner of land is and should be personally liable for taxes assessed while he is the owner of the property. * * *
The tax year in Pittsburgh and Allegheny County is the calendar year. The actual owner of the property at the time the assessment is levied and the tax is due is liable for the taxes covering the entire calendar year regardless of change of ownership, and that liability reverts back to the beginning of such year.
Accordingly, real property taxes in Pittsburgh and in Allegheny County accrue for Federal income tax purposes on January 1 (lien date) of the calendar year for which such taxes are imposed. Thus, in the case of a taxpayer who computes his taxable income under the accrual method of accounting, the tax is deductible for Federal income tax purposes in the year of the accrual date of such tax. In the case of a taxpayer who computes his taxable income under the cash receipts and disbursements method of accounting, the liability for the tax occurs as of the accrual date and is deductible for Federal income tax purposes when paid.
I.T. 3414 is hereby superseded, since the position stated therein is restated under the current law in this Revenue Ruling.
/1/ Prepared pursuant to Rev. Proc. 67-6, C.B. 1967-1, 576.