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DOR Audits Procedure and Penalty

SECTION 66.   Section 32 of chapter 62C of the General Laws, as most recently amended by section 45 of chapter 131 of the acts of 2010, is hereby further amended by adding the following subsection:-

(f) In the event of a deficiency assessment issued by the department after an audit of a return filed by a taxpayer for a tax period, where the length of the audit exceeded 18 months as measured from the department's opening conference with the taxpayer or the taxpayer's duly authorized representative to discuss a field audit or, in the case of a desk audit from its initial letter or other written communication to the taxpayer notifying the taxpayer that a desk audit has been initiated, to its issuance of a notice of intent to assess tax, the department shall determine the interest payable with respect to such deficiency after the expiration of such 18 month period and before the department's issuance of such notice of intent to assess, by reducing the rate provided in subsection (a) by 2 percentage points, but not below zero, or, in the case of an audit whose length as so determined exceeds 36 months, by reducing the rate provided in subsection (a) with respect to such period after the expiration of 18 months and before the department's issuance of the notice of intent to assess by 2.5 percentage points, but not below zero, if in either instance it determines that the taxpayer complied with all requests for information or documentation made during the audit period with substantial promptness and completeness, and where the taxpayer is not otherwise responsible for the extended duration of the audit. A taxpayer may appeal a department determination that the taxpayer did not comply with an audit request for information or documentation with substantial promptness and completeness to the appellate tax board along with any assessed tax in dispute.