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October 3, 2024
2024-1819

Massachusetts 60-day tax amnesty program to start November 1, 2024

The Massachusetts Department of Revenue (MA DOR), on September 13, 2024, announced that the 60-day tax amnesty program authorized by the FY 2025 budget bill (HB 4800) will run from November 1, 2024 through December 30, 2024. Amnesty applies to tax returns due on or before December 31, 2024.

The commissioner will waive most penalties1 for taxpayers that participate in the amnesty program and come into tax compliance by filing outstanding returns and paying tax and interest owed for the periods covered by the returns. Penalties will not be waived, however, for any period for which taxpayers do not properly file a return by December 30, 2024.

Taxpayers may only submit one amnesty request per account (tax) type but may include multiple tax periods. Separate amnesty requests must be submitted for each account type.

The MA DOR stated it will send amnesty eligibility letters to taxpayers with existing tax liabilities.

Taxes eligible for penalty waiver under the amnesty program include, but are not limited to, the corporate combined excise tax, corporate excise tax, entity level (63D) tax, financial institution excise tax, sales and use tax, fiduciary income tax, life insurance excise tax, partnership income tax, personal income tax, estate tax, inheritance tax, withholding room occupancy tax, satellite service tax, special fuel tax, gasoline fuel tax, aviation gasoline tax, alcoholic beverages excise tax, urban redevelopment excise tax, cigarette tax, cigar tax, marijuana excise tax, motor vehicle excise tax, motor vehicle sales-use tax, meals tax (before July 1, 2024) and meals, food and beverage tax.

Amnesty does not apply to penalties the commissioner does not have the sole authority to waive, such as penalties associated with 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. Non-eligible taxes include the deeds excise tax, deeds excise-registry tax, emergency paid sick leave tax, paid family and medical leave tax, jet fuel tax, premium pay tax, public utility excise tax, and vehicular rental surcharge. Amnesty is not available for certain licenses, including those for special fuels, jet fuel, gasoline fuel, cigars and cigarettes.

The commissioner is not authorized to waive interest charges.

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. The MA DOR indicated that eligible non-filers who have not previously been contacted by the DOR may be subject to a three-year limited look-back period. Non-filers will not qualify for limited look-back if (1) they have been contacted by the MA DOR about unfiled returns, (2) they are reporting trustee taxes (e.g., sales, use, meals, withholding) that were collected but not paid, or (3) they are filing an estate tax return.

Taxpayers currently under audit should contact their assigned DOR auditor to discuss amnesty eligibility.

Penalties cannot be waived for taxpayers who are or have been subject to a tax-related criminal investigation or prosecution, who are in active bankruptcy, or who have delivered or disclosed a false or fraudulent application, return, document or other statement. Penalty waiver will not be granted for taxes already paid. Amnesty is not available to taxpayers that received amnesty relief in 2015 or 2016 for the same tax type and period, or to taxpayers seeking a refund of tax or a credit for overpayment.

Taxpayers participating in the amnesty program retain their right to file an amended return or apply for abatement. Returns filed under the amnesty program are subject to audit.

The MA DOR has posted Tax Amnesty 2024 FAQs and indicated that additional information on the program is forthcoming. The FAQs describe how to request amnesty as well as the terms and conditions of the amnesty program, among other topics.

Implications

Eligible taxpayers should consider participating in the Massachusetts tax amnesty program to have otherwise applicable penalties waived. Participating taxpayers who received a Tax Amnesty 2024 Eligibility Letter from the MA DOR should keep in mind that additional interest may accrue from the date of the letter and the time they submit the amnesty request. Any overpayments made as a result of participating in the amnesty program will first be applied to other tax periods with outstanding liabilities before being refunded.

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

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Endnote

1 HB 4800 provides that waiver is not authorized for penalties due under Sections 35A ("penalty for underpayment of tax required to be shown on the return"), 35D ("inconsistent position in reporting of income; disclosure") or 35F ("penalty for automated sales suppression device") of Chapter 62C of the General Laws.

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Contact Information

For additional information concerning this Alert, please contact:

State and Local Taxation

Published by NTD’s Tax Technical Knowledge Services group; Chris DeZinno, legal editor