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Brian Gordon, CPA, is the Director of State and Local Taxes at Sanders Thaler Viola & Katz, LLP. Previously, Brian was with the NYS Department of Taxation and Finance as the District Audit Manager in Manhattan and Brooklyn. He is a member of the NYSSCPA New York, Multistate & Local Taxation Committee and writes and speaks on various tax issues. He can be reached at 516-704-7130 or 516-510-6041 and email: bgordon@st-cpas.com.

Massachusetts Tax Amnesty

By Brian Gordon

The Massachusetts Department of Revenue is providing a Tax Amnesty program effective April 1, 2016 and it will run through May 31, 2016 for qualifying taxpayers. All tax types are included, except for Preferred Provider excise and taxes covered under the International Fuels Tax Agreement (IFTA ).

Amnesty is available to both businesses and individuals, who have not yet registered or filed a tax return or who has underreported tax on a previously filed return for any tax return that was due on or before December 31, 2015. This is for taxes due of which the state of Massachusetts is not yet aware. This amnesty program does not cover existing tax liabilities. If you already have an existing liability determined by the state of Massachusetts, amnesty will not apply to that liability.

Amnesty is not available to those who are or have been the subject of a tax-related criminal investigation or prosecution, who have previously filed a false or fraudulent return or statement or who file a fraudulent amnesty return. Additionally, any taxpayer who participated in the 2014 or 2015 tax amnesties conducted by Massachusetts is not eligible for the same tax types or tax periods.

Benefits of Massachusetts Tax Amnesty Program.

  • Three year lookback period.

If you have underreported a tax due for several years you can file under this amnesty program and limit your liability to only three years.

  • No penalties.

You will have to pay the full tax for three years plus interest.

Online Amnesty Form

An online amnesty form is available on the Massachusetts Department of Revenue webpage www.mass.gov. The Department will calculate the interest for each tax period for the taxpayer. You must submit an electronic payment for the balance due with your amnesty return.

If, at a later date, the state of Massachusetts finds that you have a liability due them and you have failed to take advantage of the amnesty program, they may impose the following consequences:

  • Penalties which can double the tax liability.
  • You’ll lose the limited lookback period. There is no statute of limitations on unfiled returns.
  • You may risk a six-year lookback on a previously filed return if certain underreporting criteria are identified.
  • You will face escalating enforcement efforts, including potential criminal prosecution.

This is not an all-encompassing amnesty program as it does not include liabilities already on the books. It is for unreported or underreported tax. This is similar to New York State’s Voluntary Disclosure Program. New York’s program is not referred to as an amnesty, but offers similar benefits on an ongoing basis. One has to apply for the New York program and, after meeting certain criteria, will be accepted and will receive the benefits under the program.

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