Program Summary

Massachusetts General Laws, Chapter 62E authorized the Massachusetts Department of Revenue (MDOR) to begin operating its Bank Match Program in 1995. The Federal Personal Responsibility and Work Opportunity Reconciliation Act was signed by President Clinton in 1996 and included a requirement that every state implement its own Bank Match Program, due in large part to MDOR's successful program. The federal program, as well as many other states, refers to their programs as "Data Match", although the programs are essentially the same as MDOR's. The biggest difference is that while nearly every other state uses its program solely for child support purposes, Massachusetts operates its Bank Match Program to enforce tax and state entitlement laws as well.

In the interest of safeguarding sensitive financial information and with progressive advancements in technology the prior outdated Bank Match Directive 94-10 was replaced with a newer Directive 09-1 which now mandates financial institutions to file and transmit data electronically. The Department of Revenue encourages all financial institutions to review the most current Directive 09-1 Bank and Financial Institution Data Match Program.

Bank Match Participants Continue Filing to Massachusetts

Public Law 105-200 does not prohibit any state from requiring financial institutions to report account information directly to that state when the state's Data Match/Bank Match Program is used for other purposes. The information collected from multi-state financial institutions by the federal government is used solely for child support enforcement efforts. In contrast, the information collected by the Massachusetts Bank Match Program is used to enforce not only child support laws, but also its tax laws and state entitlement programs. Therefore, despite the reporting option for multi-state financial institutions, all financial institutions doing business in Massachusetts must file Bank Match reports to the Massachusetts Department of Revenue.

Business Accounts

Massachusetts continues to require its Bank Match participants to report all business account owners and their corresponding Federal Identification numbers (FID). They are to be reported under Method One, the All Accounts Method and Method Two, the Matched Accounts Method. The Data Match Specifications use the terms "Social Security number" or "SSN" because unlike Massachusetts, many other states require only individual account owners be reported. For Bank Match business accounts, the FID is to be reported wherever the Specifications require an SSN.

Program Participation

All financial institutions subject to the reporting requirements of Directive 09-1 must elect one of the two reporting methods. To do so, each institution must complete and submit an online Bank and Financial Institutions Data Matching Declaration Form. Financial institutions continue to have the opportunity to choose between Method 1, the "All Accounts" method of reporting or Method 2, the "Matched Accounts" method. However, the Commissioner encourages institutions to use the "All Accounts" method wherever possible.

Method 1: The "All Accounts" Method
The "All Accounts" method of reporting requires each institution to submit a file annually listing each Taxpayer's Identification Number or TID (SSN or FID) maintaining an account at the institution to the Commissioner by April 30 of every calendar year.

Method 2: The "Matched Accounts" Method
The "Matched Accounts" method of reporting allows financial institutions or an authorized third party designee to retrieve a downloadable file for matching from Massachusetts Department of Revenue. The Commissioner's Inquiry file can be downloaded via a secured web application (WebFile for Business) or SFTP a Secure Shell Protocol also known as "SSH". Each upload process requires an authenticated user name and password for WebFile for Business.

Regardless of the reporting method chosen, the mechanisms for submitting required information have significantly changed. Beginning with any reports due on or after April 15, 2009, Banks and Financial Institutions must comply with these revised electronic reporting requirements.

Banks, Financial Institutions and authorized third party designees required to transmit data must also register as a Professional Tax Preparer with Bulk Filing Rights and maintain an active online WebFile for Business account with Massachusetts Department of Revenue to begin.

Moreover, and in unique circumstances, data may be exchanged via Compact Disk (CD) using the latest industry standards encryption methodology by submitting in writing, a request for permission to file on CD. If approved, the applicant will be instructed to work directly with MDOR Computer Operations Center who will provide detailed instructions and exchange public/private keys and certificates as required to safe-guard sensitive data. The submission of files on encrypted CD is not automatically allowed and the reporting institution must demonstrate good cause for such a request.

Extensions

Every financial institution subject to the reporting requirements of this new directive may request an extension of time to file the information electronically. Extensions of time are not automatically granted and the reporting institution must demonstrate good cause for requesting the extension. An extension of time for filing the required information may be granted provided that the request for extension is filed with the Commissioner by the date on which the reports are due.

Getting Started

To begin participation click on the Bank and Financial Data Matching Declaration Form to register for the program. For changes or to modify, change account detail and address updates please resubmit a new Bank and Financial Data Matching Declaration Form and check "update".

Furthermore, transmitter's utilization of data uploads and downloads regardless of which option selected, must also register as a Professional Tax Preparer (PTP) with Bulk Filing Rights and maintain an active online "WebFile for Business" account with Massachusetts Department of Revenue. Click on to register as a PTP.

For assistance with registration contact the Bank Match Compliance Unit at 617-887-5030.

Massachusetts Data Match Specifications for Bank Match

The specifications were formulated for use by all financial institutions for Bank and Financial Data Matching. These specifications were created as a result of a collaborative effort between states, financial institution and the federal government. Click Financial Data Match Specifications pdf format of Financial Data Match Specifications Handbook to obtain a copy of the handbook.

Need More Information

For any information regarding the Massachusetts Department of Revenue's Bank and Financial Institutions Data Matching Program, please email us at tsdbankmatch@dor.state.ma.us or to contact the Bank Match Compliance Unit directly at 617-887-5030.

All requests for extension of time and/or pre-approval for alternative CD encryption filing should be faxed to 617-660-9638 and original request via US mail on company letter head from the principle of the company or compliance manager to:

Massachusetts Department of Revenue
Bank & Financial Data Match Program
PO Box 7013
Boston , MA 02204

See other supporting documents supporting Bank and Financial Institutions Data Match Program listed below.
Directive 09-01 Information Reporting Requirements for Financial Institutions under the Bank Match System, G.L. c. 62E

Directive 97-3, Primary and Secondary TIN Reporting Requirements for Financial Institutions under the Bank Match System, GL c. 62E

Please review the latest version of the <u>SSH transmission guide for Bulk E-filers</u> pdf format of Bulk E-Filer Registration and Transmission Guide .

Visit IRS Publication 1220 for 1099 Reporting