General

1. What is MA Tax Amnesty 2016?

2. When will MA Tax Amnesty 2016 take place?

3. What are the benefits of participating in MA Tax Amnesty 2016?

4. How should I prepare for MA Tax Amnesty 2016?

5. How do I participate in MA Tax Amnesty 2016?

6. What if I do not participate in MA Tax Amnesty 2016?

7. What does “limited look-back period” mean?

8. Who qualifies for the limited look-back period?

9. Who does not qualify for the limited look-back?

10. If I do not qualify for the limited look-back, is there still a benefit to filing for amnesty?

11. What records am I required to keep?

12. What if I overpay?

13. Why is the Amnesty Return only available online?

14. Can I claim credit for previous payments?

15. Can I participate in the MA Tax Amnesty 2016 using an Individual Tax Identification Number (ITIN) issued by the IRS?

16. Can I report individual Use Tax when filing my Amnesty Return for individual income tax periods?

17. Can I file Estate Tax through the online Amnesty Return?

18. Can a partnership or S corporation file a nonresident composite return through the online Amnesty Return?

19. Can a partnership file a Form 3 and benefit from a waiver of penalties?

20. Can I bulk file an Amnesty Return for withholding tax?

21. What if I’ve recently been contacted by DOR about a past due tax return or I’m currently under audit?

22. If I participate in MA Tax Amnesty 2016, am I giving up any rights?

23. Can I participate in a future amnesty?

24.  Is my amnesty return subject to audit?

 


Eligibility

25. What tax types are eligible for MA Tax Amnesty 2016?

26. Who is eligible to participate in MA Tax Amnesty 2016?

27. Can I file an Amnesty Return that claims a refund or an overpayment to be credited to the following year?

28. Can I use a refund due in one year to reduce the amount owed on the amnesty return for another year?   

29. Who is not eligible for MA 2016 Tax Amnesty?

30. Am I eligible if I participated in previous amnesty programs?

31. Will the Department of Revenue be issuing any advance notice to taxpayers who may be eligible to participate in MA Tax Amnesty 2016? 

32. If I’m not currently registered with the Department of Revenue, am I eligible for MA Tax Amnesty 2016?

33. Do I have to be a Massachusetts resident or have my business located in the state to participate in the MA Tax Amnesty 2016?


Payment

34. What types of electronic payments are allowed?

35. How does ACH-Debit work?

36. Will I be charged a convenience fee if I use my credit card?

37. Does the Commonwealth receive any portion of the convenience fee?

38.What happens if my electronic payment fails?


General

1. What is MA Tax Amnesty 2016?

MA Tax Amnesty 2016 is a one-time opportunity for both individuals and businesses to register, file delinquent returns or amend prior tax filings free of tax penalties and any interest due on those penalties. Each original or amended tax return included in your amnesty filing must show a tax due.

The amnesty return cannot be used to request a refund or solely to make payment on an existing liability already billed by the Department of Revenue.  

2. When will MA Tax Amnesty 2016 take place?

The amnesty program will be open from April 1 -  May 31, 2016.

3. What are the benefits of participating in MA Tax Amnesty 2016?

First, it’s easy. MA Tax Amnesty 2016 is completed online.

Taxpayers will only have to pay the tax owed plus interest. Tax penalties and any interest due on those penalties will be waived.

Taxpayers who have not been previously contacted by DOR will benefit from a three-year limited lookback period. If a taxpayer reports and pays the tax due plus interest for all eligible periods during MA Tax Amnesty 2016, any returns and associated tax, penalties and interest for any earlier tax periods will not be required to be reported and will not be subject to future assessment by the Department of Revenue in the absence of fraud or other criminal intent.  

DOR will not initiate a criminal investigation or seek prosecution in relation to any returns submitted and paid in good faith under this amnesty program.

4. How should I prepare for MA Tax Amnesty 2016?

First, review your prior filing obligations to determine if you failed to file a return or underreported the correct amount of tax due to the Commonwealth.

Once you have reviewed prior obligations, complete the required returns and schedules to determine the correct amount of tax to report.

5. How do I participate in MA Tax Amnesty 2016?

We are making participation as easy as possible. We will have a simple online process for completing and submitting a streamlined amnesty return that will be available April 1st. The online amnesty return will be the only return of record filed with the Commissioner for this amnesty program.   

You’ll enter the tax you owe. The online amnesty return will calculate the correct interest and total amnesty balance due. Full payment will be submitted online, along with the amnesty return. There is no need to mail anything to DOR.

6. What if I do not participate in MA Tax Amnesty 2016?

If it is determined that you failed to register, file a required return or underreported any tax that was due, you will:

  • Forgo the limited lookback period. There is no statute of limitations on any unfiled return so you could be required to file returns and pay the full tax, penalty and interest for all years owed, no matter how far back the problem goes.
  • Generally be subjected to a six-year look back on a previously-filed return if certain underreporting criteria are identified
  • Remain subject to all enforcement efforts, including any potential criminal prosecution
  • Be assessed double the amount of tax due for situations involving fraud or intentional failure to file, in addition to other penalties and interest.

7. What does “limited look-back period” mean?

Outside of Amnesty, if a taxpayer has not filed all required tax returns, there is no limit to how far back DOR may require returns to be filed. Generally DOR requires a taxpayer to file returns for the most recent seven years. That period is referred to as the look-back period. For this amnesty program  DOR will only require an eligible non-filer who has not been previously in contact with the Department to file returns for  three prior years – returns due from January 1, 2013 through December 31, 2015, without regard to extensions.

Example: A calendar year personal income taxpayer, who has never filed a return in Massachusetts, files Amnesty Returns and pays all tax and interest due for tax years 2012, 2013, and 2014. The taxpayer will not be required to file personal income tax returns and pay tax for years before 2012.

8. Who qualifies for the limited look-back period?

The limited look-back period will apply to non-filers who have not had previous contact with DOR and who file Amnesty Returns for a particular tax type that were due from January 1, 2013, through December 31, 2015, with the appropriate payment of tax and interest. Note that the limited look-back applies separately to each tax type.

9.Who does not qualify for the limited look-back?

Non-filers who have been in previous contact with  DOR about unfiled returns do not qualify for the limited look-back. The limited look-back also does not apply if a taxpayer is reporting trustee taxes (i.e. sales/use, meals, withholding etc.) where the tax was collected but not paid over to the Commonwealth, where a taxpayer has under-reported their tax on a previously filed return or where a taxpayer has already filed all required returns due from January 1, 2013 through December 31, 2015. 

10. If I do not qualify for the limited look-back, is there still a benefit to filing for amnesty?

Yes. Taxpayers who do not qualify for the limited look-back but are otherwise eligible for amnesty may  benefit from a penalty waiver for all returns filed and paid through the amnesty program.                 

Example: A business taxpayer received a sales tax audit notice from  DOR covering the period ending September 30, 2011, through the period ending November 30, 2015. Although the taxpayer does not qualify for the limited look-back, the taxpayer is eligible for a penalty waiver for all tax periods under review as long as the required tax returns are filed with payment of tax and interest due.

11. What records am I required to keep?

Although you are not required to submit the usual tax returns in this amnesty program, returns must still be completed to calculate the correct tax. Retain the returns, along with any schedules and related documents for your records. All tax returns, schedules and documents used to calculate the tax reported on the amnesty return must be made available if requested by the Department of Revenue.

12. What if I overpay?

Any overpayments of tax and interest under the amnesty program will be applied to other tax periods with outstanding liabilities, if any, or will be refunded if no outstanding liabilities exist.

13. Why is the Amnesty Return only available online?

The MA Tax Amnesty 2016 program has been designed to be as efficient as possible for both the taxpayer and DOR.  Submitting the Amnesty Return electronically means that the entire process is streamlined.

14. Can I claim credit for previous payments?

Yes.  Non-filers who have a tax due are allowed to claim credit for certain prepayments.  Prior to beginning your Amnesty return please verify the amount of all timely  estimated tax payments or extension payments.   If you can’t verify the payments from your records, you should log in to your Web-File for Income or MassTaxConnect account to review your payments.

15. Can I participate in the MA Tax Amnesty 2016 using an Individual Tax Identification Number (ITIN) issued by the IRS?

Yes. You can use a valid Individual Taxpayer Identification Number (a tax processing number issued by the Internal Revenue Service) to file an Amnesty Return for eligible Personal Income Tax periods.

16. Can I report individual Use Tax when filing my Amnesty Return for individual income tax periods?  

Yes. The Amnesty Return will allow you to report individual use tax obligations at the same time you are filing for an eligible income tax period.  Click here for more information about Individual Use Tax.   

17. Can I file Estate Tax through the online Amnesty Return?

Yes. Complete the Massachusetts estate tax return Form M-706 and enter the tax due on the online Amnesty Return.  Interest will be calculated for you.  Keep the original Estate Tax Return and any supporting documents. You will be contacted by DOR’s Estate Tax Unit for verification once the amnesty program is closed.

18. Can a partnership or S corporation file a nonresident composite return through the online Amnesty Return?

Yes. A partnership or S corporation seeking to file a nonresident composite return with a tax due can file an Amnesty Return. The benefits of the Amnesty Program will only apply to a nonresident partner or shareholder included in the composite return.

19. Can a partnership file a Form 3 and benefit from a waiver of penalties?

Yes. Here is what is needed. A partnership that is a non-filer may file any delinquent partnership returns (Form 3) during the amnesty period and benefit from a waiver of penalties that could be imposed on the partnership, including penalties imposed under G.L. c. 62C, § 34.  Please note, that a partnership seeking this benefit cannot file an Amnesty Return but must file a complete Form 3Also note that the three-year limited lookback period is not available in the case of the partnership and the benefits of this penalty waiver do not extend to the partners of the partnership. 

Form 3 should be filed electronically, if that option is available, and the partnership should then follow up with a letter to the Office of the Taxpayer Advocate at PO Box 9552, Boston, MA 02114 (or send by Fax to 617-626-3799), requesting a waiver of penalties. If Form 3 is filed on paper, the paper return and a letter requesting a waiver of penalties, should be faxed or mailed directly to the Office of the Taxpayer Advocate. 

20. Can I bulk file an Amnesty Return for withholding tax?

No. A separate Amnesty Return must be filed for each individual taxpayer’s withholding tax.

21. What if I’ve recently been contacted by DOR about a past due tax return or I’m currently under audit?

Taxpayers who have received a notice of failure to file or are under audit can still benefit from participating in MA Tax Amnesty 2016. Penalties will be waived for all tax periods identified in the failure to file notice or included in the audit period as long as the tax and interest are paid with an amnesty return during the amnesty period. 

22. If I participate in MA Tax Amnesty 2016, am I giving up any rights?

No. A taxpayer who files an outstanding return or reports an additional tax due on a previously-filed return retains the right to file an amended return or application for abatement within the usual time limits. 

23. Can I participate in a future amnesty?

A taxpayer who participates in the MA Tax Amnesty 2016 is prohibited from participating in any future tax amnesty programs for the next consecutive 10 years, beginning in calendar year 2015.

24. Is my amnesty return subject to audit?

Yes. The Department of Revenue 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.   


Eligibility

25. What tax types are eligible for MA Tax Amnesty 2016?

All tax types administered by the Department of Revenue are eligible, except for taxes paid by registered motor carriers reporting fuels tax under the International Fuels Tax Agreement (IFTA) and preferred provider excise paid under chapter 176I of the Massachusetts General Laws.

Please note that local property taxes and Massachusetts unemployment taxes are not administered by the Department of Revenue and are not eligible for MA Tax Amnesty 2016.

26. Who is eligible to participate in MA Tax Amnesty 2016?

Taxpayers who have failed to register with the Department of Revenue, failed to file a return or failed to report the full amount of tax owed on a previously filed return for any tax return due on or before December 31, 2015 are generally eligible to participate in this amnesty program.

27. Can I file an Amnesty Return that claims a refund or an overpayment to be credited to the following year?

No. A taxpayer may not file an Amnesty Return to claim a refund or a credit attributable to an overpayment of tax.  A taxpayer must follow the Department’s general filing procedures for any returns claiming a refund or credit of an overpayment.

28. Can I use a refund due in one year to reduce the amount owed on the amnesty return for another year?  

No. Any tax due returns must be filed and paid in full through the online amnesty return. Any refund returns must be filed separately through the Department’s general filing procedure. Refunds from non-amnesty returns will not be applied directly to balances due on amnesty returns. 

29. Who is not eligible for MA 2016 Tax Amnesty?

  • Any taxpayer who has been or is the subject of a tax-related criminal investigation or prosecution
  • Any taxpayer who has previously filed a false or fraudulent return or statement
  • Any taxpayer who files a fraudulent amnesty return
  • Any taxpayer who delivers or discloses a false or fraudulent application, document, or other statement to the Department of Revenue in connection with a tax amnesty application
  • Any taxpayer, who has signed a settlement agreement with the Department’s Litigation Bureau, Office of Appeals, or Offer-in-Settlement Unit for tax periods covered under the MA 2016 tax amnesty

The limited amnesty programs offered in 2014 and 2015 covered only previously-billed tax liabilities. MA tax amnesty 2016 is for non-registrants, non-filers and under reporters. Most taxpayers who participated in one of the previous amnesty programs will also be eligible for MA tax amnesty 2016.

31. Will the Department of Revenue be issuing any advance notice to taxpayers who may be eligible to participate in MA Tax Amnesty 2016? 

Unlike other recent amnesty programs that applied to existing liabilities, this amnesty program is open to non-registrants, non-filers and under reporters. Therefore, DOR will not be issuing amnesty bills to inform taxpayers that they are eligible and to tell them what they owe. DOR  may send informational mailings to taxpayers in the system who appear to be non-filers or who may have underreported tax and might benefit from the program.

32. If I’m not currently registered with the Department of Revenue, am I eligible for MA Tax Amnesty 2016?

By completing the Amnesty Return, you’ll be automatically registered with DOR.  Take a look at the information on the amnesty webpage to determine your eligibility and learn more about the program.

33. Do I have to be a Massachusetts resident or have my business located in the state to participate in the MA Tax Amnesty 2016?

No. The MA Tax amnesty 2016 is open to all taxpayers who are required to register and/or file returns for the eligible tax periods with DOR.


Payment

34. What types of electronic payments are allowed?

Two forms of electronic tax payment will be accepted during the amnesty program. You can choose to pay the amnesty balance due through an electronic payment from your checking or savings account (ACH-debit) or by credit card.    

35. How does ACH-Debit work?

First you must provide DOR with your financial institution's routing number -- the first nine digits located on the bottom left corner of a check from your bank -- and your account number, which can be up to 17 characters.     

Then, DOR’s bank electronically sends a debit request to your bank through the National Automated Clearing House (ACH) system. Assuming the funds are available in your bank account, your bank will electronically transfer the funds to DOR. 

36. Will I be charged a convenience fee if I use my credit card?

Yes, your payment will be processed by a third party credit card vendor with a 2.49% convenience fee charged by the vendor. DOR accepts MasterCard, Visa, Discover and American Express.  It’s safe and secure.

Your information will only be used to process your amnesty payment.  On your monthly credit card statement, the payment to DOR will be listed as “Mass. DOR of Revenue.”

37. Does the Commonwealth receive any portion of the convenience fee?

No. The convenience fee defrays the cost of processing credit card payments and is paid directly to the third party credit card vendor. No portion of this fee is collected or retained by the Commonwealth.

38.What happens if my electronic payment fails?

You will be notified in writing if your payment fails. Note that to qualify for amnesty, DOR must receive a valid payment by May 31, 2016.