If you have received a Notice of Intent to Assess from the Department of Revenue as a result of an audit or other notice of a proposed change as a result of a routine verification of your return, and disagree with the proposed tax assessment, you have the right under G.L. c. 62C, §§ 26(a) or 26(b) to file a Form DR-1: Office of Appeals Form to appeal and request a pre-assessment conference with the Office of Appeals to contest the proposed assessment before the assessment is made.
If you have received a Notice of Assessment that you want to protest, you have the right under G.L. c. 62C, § 37 to file an Application for Abatement/Amended Return to appeal and request a post-assessment hearing with the Office of Appeals to contest the tax assessment. Similarly, if you determine that you have overpaid your taxes on your tax return, you have the right under G.L. c. 62C, § 37 to file an Application for Abatement/Amended Return and request a hearing on your abatement request with the Office of Appeals.
Notice of Intent to Assess
This notice is issued by the Commissioner of Revenue to notify the taxpayer of the intent to propose a tax change (either increase or decrease). The taxpayer has twenty-five (25) days to appeal this notice by filing Form DR-1: Office of Appeals Form. If the taxpayer does not file Form DR-1, the tax will be assessed and collection activity will begin.
Notice of Assessment
This notice is issued by the Commissioner to notify the taxpayer of an increase in the taxpayer’s tax, interest, and penalties. Time limits apply. Collection activity will be put on hold with the filing of the Application for Abatement/Amended Return.
Application for Abatement/Amended Return
This form is needed to apply for an abatement or to amend a return. Collection activity will be put on hold. Abatements generally must be filed within three years from the filing of the tax return, two years from the date the tax was assessed, or one year from the date the tax was paid, whichever is later. See Administrative Procedure 627, Section 627.1.
Form DR-1: Office of Appeals Form
This form is filed by the taxpayer to notify the Department of Revenue that the taxpayer is appealing a pre-assessment tax or penalty dispute. This form is also used for requesting settlement when tax has already been assessed. The taxpayer must file an Application for Abatement/Amended Return to request an abatement or post-assessment hearing.
Form B-37: Special Consent Extending the Time for Assessment of Taxes
This is a waiver executed for pre-assessment cases before the Office of Appeals. This waiver extends the period for statute of limitations to ninety (90) days from a final determination issued by the Office of Appeals. This consent can be terminated by the taxpayer.
Form M-2848: Power of Attorney and Declaration of Representative
This form designates the taxpayer’s representative. The form must designate the tax type and the period and have signatures of the representative as well as the taxpayer. If the designee is “Other,” the form must be witnessed by two individuals or notarized. The taxpayer can revoke its representation by notifying the Department of Revenue. Additionally, a new Power of Attorney revokes a previous Power of Attorney unless otherwise designated.
The Office of Appeals has the authority to settle tax disputes with taxpayers by accepting less than the full amount of tax in dispute. The Department of Revenue will consider settling a dispute if, after taking into consideration the hazards of litigating the dispute, it is in the best interest of the Commonwealth to accept a lesser amount of tax.
If the Department of Revenue and the taxpayer are able to reach an agreement on how to settle their tax dispute, the terms of the agreement will be formalized in a written Settlement Agreement that both the taxpayer and the Department of Revenue sign.
Letter of Determination
If a settlement is not reached, or the taxpayer has not requested settlement consideration of a tax dispute, the Office of Appeals will issue a Letter of Determination to the taxpayer setting forth its decision regarding the taxpayer’s dispute.