Massachusetts tax amnesty offers attractive benefits
Tax Amnesty Program in brief
The department has established a 60-day Tax Amnesty Program for the period of Nov. 1, 2024 through Dec. 30, 2024. The program is available to taxpayers with unfiled returns, underreported obligations, or existing tax obligations, taxpayers currently under audit for periods with returns due by Dec. 31, 2024, taxpayers with cases pending resolution or before the Massachusetts Appellate Tax Board, and taxpayers with open collection cases. Most department-administered taxes are eligible, including personal income tax, corporate excise tax and sales and use tax. Eligible taxpayers must apply for the program through an Amnesty Request, file delinquent or amended returns, and pay outstanding interest by Dec. 30, 2024 to receive a waiver of eligible penalties.
Eligibility
While most department-administered taxes are eligible, the Tax Amnesty Program will not include the public utility excise tax, the deeds excise tax, and the abandoned bottle deposits tax, among others, as well as taxes for which the department does not have sole authority to waive penalties, such as taxes administered under the International Fuels Tax Agreement.
The Tax Amnesty Program will offer a limited look-back period of three years to eligible non-filers (taxpayers who have unfiled returns due) who have not been previously contacted by the department. Those taxpayers must submit an Amnesty Request and file all returns that were due from Jan. 1, 2022, through Dec. 31, 2024, with full payment of tax and interest. The limited look-back period will not be available to non-filers who have been contacted by the department about unfiled returns, taxpayers reporting trustee taxes (sales and use, meals, and withholding taxes) where the tax was collected but not paid to the Commonwealth, and taxpayers filing estate tax returns.
The Tax Amnesty Program applies separately to each tax type submitted for the program. The outstanding tax and interest are due upon submission of amnesty-related returns.
Certain taxpayers are ineligible to apply for the Tax Amnesty Program, including the following:
- Taxpayers that received amnesty relief in 2015 or 2016 for the same tax type and period
- Taxpayers seeking a waiver of penalties related to a tax that has already been paid or a refund of tax or a credit for an overpayment
- Taxpayers under criminal investigation or prosecution for tax-related crimes
- Taxpayers in active bankruptcy
- Taxpayers in, or have been, in tax-related criminal investigation or prosecution, who filed false or fraudulent return, statement or a fraudulent amnesty return
However, taxpayers under current payment agreements that were entered into before the amnesty period and those with pending appeals may still participate in the Tax Amnesty Program.
Application
Business taxpayers must submit individual Amnesty Requests through MassTaxConnect for each eligible tax types for which the taxpayer is seeking amnesty. Taxpayers may include multiple periods for the same tax type in an Amnesty Request. Previously filed Amnesty Requests cannot be changed. However, a new Amnesty Request may be submitted to include additional tax periods, so long as the additional Amnesty Request is submitted prior to the close of the amnesty period. Full payment of the tax and interest is due when the return is submitted.
Risks
Taxpayers should be aware that the department retains the right to make any additional assessments for the tax types and tax periods included in the amnesty return within the usual time limits provided for audit.
Takeaways
The Massachusetts Tax Amnesty Program offers taxpayers a limited time opportunity to come into compliance with Massachusetts tax liabilities without incurring costly penalties. While taxpayers who have been contacted by the department will likely receive a notice through the mail, all taxpayers who believe they have eligible liabilities and have not received a notice should review the eligibility criteria to determine if they may be eligible to capitalize on this opportunity. The 60-day period requires taxpayers to be efficient in reviewing their eligible liabilities due to the short program period. Taxpayers that believe they are eligible for the Tax Amnesty Program should contact their Massachusetts tax advisers with questions.
