Massachusetts Legislature Passes Bill Authorizing Tax Amnesty Program

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Massachusetts Legislature Passes Bill Authorizing Tax Amnesty Program

On October 30, 2008, the Massachusetts Legislature passed a bill authorizing the Commissioner of Revenue to establish a tax amnesty program for a period of two consecutive months between January 1, 2009 and not later than June 30, 2009. During the amnesty program, the Commissioner may waive all penalties, but not the interest, on certain unpaid taxes subject to certain conditions.

Note that the Commissioner has not yet established this amnesty program, but is expected to provide details soon.

Coverage. The amnesty program applies to all penalties that could be assessed by the Commissioner for the failure of the taxpayer:

to timely file any proper return for any tax types and for any tax periods;
to file proper returns that report the full amount of the taxpayer's liability for any tax types and for any tax periods;
to timely pay any tax liability; or
to pay the proper amount of any required estimated payment toward a tax liability.

Penalties may be waived for the covered failures without the need for any taxpayer to show reasonable cause or absence of willful neglect if the taxpayer prior to the expiration of the amnesty period voluntarily files proper returns for which the taxpayer has or had a filing obligation and pays, or at the Commissioner's discretion provides security for, the full amount of tax due or the Commissioner's assessments with interest.

Amnesty may be offered to taxpayers who have either any unpaid self-assessed liability or who have been assessed a tax liability, whether before or after their filing of a return, which assessed liability remains unpaid.

Ineligible taxpayers, liabilities, and penalties. The amnesty will not apply to

any taxpayer who, before the start date of the amnesty program, is or has been the subject of a tax-related criminal investigation or prosecution;
a tax liability of any tax type for a period commencing on or after January 1, 2007; or
penalties that the Commissioner would not have the sole authority to waive.