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02 August 2024

Massachusetts establishes a tax amnesty program, updates IRC conformity date for personal income tax

On July 29, 2024, Massachusetts Governor Maura Healey signed the fiscal year (FY) 2025 budget bill, HB 4800, into law. The law's tax-related provisions include a tax amnesty program and an Internal Revenue Code (IRC) update for personal income tax purposes.

Amnesty

HB 4800 authorizes the Massachusetts Commissioner of Revenue to establish a 60-day tax amnesty program to run in FY 25, but end by June 30, 2025. The amnesty program will apply to tax returns due on or before December 31, 2024.

In exchange for participating in the amnesty program and coming into tax compliance, the commissioner will waive most penalties, except for penalties due under Sections 35A, 35D or 35F of Chapter 62C of the General Laws.1 Penalties will not be waived for any period for which the taxpayer does not properly file the return. Amnesty does not apply to penalties the commissioner does not have the sole authority to waive, such as the fuel taxes administered under the International Fuel Tax Agreement and the local portion of taxes or excise taxes collected for cities, towns or state government authorities.

The commissioner is not authorized to waive interest.

In addition to waiving penalties, the tax commissioner is authorized to determine the scope of the amnesty program, including the tax types, the tax periods covered and the applicable look-back periods, not to exceed four years.

Penalties cannot be waived for taxpayers who are or who have been subject to a tax-related criminal investigation or prosecution, or for taxpayers that have delivered or disclosed a false or fraudulent application, return, document or other statement. Taxpayers filing false or fraudulent documentation are subject to a penalty.

Taxpayers participating in this amnesty program must wait 10 years before participating in another amnesty program.

IRC conformity update

HB 4800 updates the IRC conformity date for individual income tax purposes to January 1, 2024 (from January 1, 2022).

Implications

Eligible taxpayers should consider participating in the Massachusetts tax amnesty program to have otherwise applicable penalties waived.

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Endnote

1 Section 35A ("penalty for underpayment of tax required to be shown on the return"), Section 35D ("inconsistent position in reporting of income; disclosure") or Section 35F ("penalty for automated sales suppression device").

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Contact Information

For additional information concerning this Alert, please contact:

State and Local Taxation Group

Published by NTD’s Tax Technical Knowledge Services group; Jennifer A Brittenham, legal editor

Document ID: 2024-1488

 

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