The Massachusetts Department of Revenue has unveiled the details of a two-month amnesty initiative available only to taxpayers with outstanding business tax liabilities that have been invited to participate. Technical Information Release 10-5, Massachusetts Dep’t of Revenue (Mar. 12, 2010). The amnesty program, which was approved by the Legislature last year (Ch. 166 (H.B. 4359), Laws 2009), has strict limitations and even contains a penalty provision.
Running from April 1, 2010, through June 1, 2010, and applying to tax periods ending on or before December 31, 2009, the amnesty program is limited to the following existing business tax liabilities: (1) sales and use tax; (2) sales tax on telecommunications services; (3) meals tax; (4) materialman sales tax; (5) payroll withholding taxes; (6) room occupancy tax; (7) certain local convention center financing fees and surcharges; (8) certain excise taxes, including cigarette, tobacco, club alcohol beverage, gasoline and fuels; and (9) boat and recreational vehicle sales tax.
The program is open to taxpayers that have received a “Tax Amnesty Notice” and either (1) have an unpaid and previously self-assessed tax liability for an eligible tax type; (2) have been previously assessed a tax liability for an eligible tax type by the Commissioner and are properly disputing the unpaid liability; or (3) are delinquent in paying the liability. Taxpayers that have entered into a payment agreement with the Department of Revenue prior to April 1, 2010, or that have appeals pending are eligible to participate in the amnesty program so long as they have been issued a “Tax Amnesty Notice.” The program does not extend to taxpayers that (1) are subject to a tax-related criminal prosecution or investigation prior to April 1, 2010; (2) have signed a settlement agreement with the Commissioner; or (3) have paid all tax and interest due relating to an outstanding assessment but that, as of April 1, 2010, still owe or are properly disputing penalties with regard to that assessment.
If a taxpayer qualifies for amnesty, the Commissioner will waive all unpaid penalties and interest directly attributable to those penalties upon full payment of all tax and interest due under the program. Interest on the unpaid tax liability cannot be waived. Amnesty payments are due on June 1, 2010, and will be considered timely if they are received by the Department of Revenue by or postmarked on or before June 1 at 5:00 p.m. Contrary to the purpose of most amnesty programs, which is to encourage taxpayers to settle cases and avoid penalties, Massachusetts imposes an amnesty penalty of up to $500 if the full outstanding balance of tax and interest is not timely paid.