Tax Alert

Massachusetts 2015 Limited Tax Amnesty Program

March 20, 2015

Action May Be Required By May 15, 2015

Taxpayers who have received a Tax Amnesty Notice from the Massachusetts Department of Revenue (DOR) may be eligible to participate in a 60-day Amnesty Program that will run through May 15, 2015. Under the Amnesty Program, the DOR will waive certain penalties (and penalty interest) if an eligible taxpayer makes full payment of all tax and interest due for the taxes and tax periods listed on the Tax Amnesty Notice.

Taxes eligible for this Amnesty Program include certain corporate excise taxes, estate taxes, fiduciary income taxes, and individual use tax on motor vehicles for tax periods for which the DOR issued a Notice of Assessment to the taxpayer on or before January 1, 2015. Penalties related to late filing, late payment, failure to file a proper return, underpayment of tax attributable to negligence or disregard of the tax laws or to a substantial understatement of tax, among others may be waived. Interest, other than interest attributable to the penalties, may not be waived.

To participate, a taxpayer must have received a Tax Amnesty Notice, must not be “ineligible,” must have an unpaid tax liability with respect to the tax types and tax periods covered by the Amnesty Program, including such unpaid taxes covered by a Payment Agreement, and, if a corporation, must be current in its annual report filings with the Secretary of State.

The following taxpayers are “ineligible” to participate in the Amnesty Program: taxpayers engaged in certain pending litigation with the Commissioner; taxpayers who have been or are the subject of a tax-related criminal investigation or prosecution; taxpayers who have delivered or disclosed a false or fraudulent application, document, return or other statement; taxpayers, with respect to tax periods for which the taxpayer has signed a settlement agreement; and certain taxpayers, with respect to tax periods covered by a settlement agreement, who still owe or are properly disputing certain penalties.

In addition to paying tax and interest in full, participants must agree to waive both the possibility of receiving any refund and also the possibility of contesting liability for amounts paid pursuant to the Amnesty Program. (Taxpayers who have appeals pending may be eligible to participate if the appeal is withdrawn.) Taxpayers who participate in the 2015 Amnesty Program will not be eligible to participate in future Amnesty Programs for a period of ten consecutive years, beginning in 2015.

The Amnesty Program ends on May 15, 2015. All payments (online or by check) must be received by the DOR by 5:00 p.m. on May 15, 2015. If sent by mail, the payment must be postmarked on or before May 15, 2015.

The 2015 Tax Amnesty Program is described more fully by the DOR in TIR 15-2: Limited Amnesty Program for Taxpayers with Certain Tax Liabilities.

Morse, Barnes-Brown & Pendleton would be pleased to assist you in understanding the impact of participating in the 2015 Tax Amnesty Program. Please contact Chip Wry to learn more.

Special thanks to Samuel R. Fowler, Northeastern University School of Law (’15), for his contribution to this Tax Alert.

This Tax Alert provides general information only. It is not intended to provide advice with respect to any specific set of facts, nor is it intended to advise on all developments in the law.

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