830 CMR 62C.00: STATE TAX ADMINISTRATION
830 CMR 62C.00 is hereby repealed and replaced with the following:
830 CMR 62C.22.1: Exchange of Information with Other Taxing Authorities
(1) General. M.G.L. c. 62C, § 22 governs the inspection of returns by the classes of persons in state and federal government agencies designated in succeeding paragraphs of this regulation insofar as such inspection is permissible and only upon order of the Commissioner. M.G.L. c. 62C, §23 allows the Commissioner to participate jointly with designated state and federal agencies in the examination, verification, assessment, audit or other activity to determine the proper tax liability due on any tax return required to be filed with the Internal Revenue Service or with any territory, state, or political subdivision thereof to the extent that the tax of the Federal Government or of the territory, state or political subdivision is similar to a tax imposed by the Commonwealth. A certificate by the Commissioner stating that said tax is similar shall be prima facie evidence of such similarity.
(2) Disclosure and Inspection. Returns and information from those returns required to be filed with the Commissioner may be open to inspection to certain designated individuals, as defined in this regulation, provided that:
(a) The laws of the United States, or of such territory, state, or political subdivision, requesting the inspection or information, generally restrict the disclosure of such information except for the purpose of administering tax laws; and
(b) The laws of the United States, or of such territory, state, or political subdivision, requesting the inspection or information, grant substantially similar privileges to the Commissioner.
(c) The Commissioner is satisfied that such information is to be used exclusively for the purpose of administering the tax laws of the United States or of such territory, state, or political subdivision.
Agency, the Internal Revenue Service or the Bureau of Alcohol, Tobacco and Firearms of the United States Department of the Treasury or any agent or agency designated under the laws of any territory, state or political subdivision to administer the tax laws of that territory, state, or political subdivision.
Inspect, permission to inspect a tax return shall include permission to receive copies of the tax return upon payment of the required fee.
Returns, is any tax return, tax information return, or declaration, together with any schedules, lists or other statements designed to be supplemental to, or to become a part of, such return, which are filed with the Commissioner. In addition, a return includes information developed by the Department of Revenue based on material filed, or required to be filed, with the Commissioner, or based on information received from the Internal Revenue Service or any other taxing authority or derived from any other source.
(4) Requirements. No information may be divulged unless the following requirements are first complied with:
(a) The request must specify in writing:
1. That the purpose for each requested examination is exclusively for the administration of tax laws;
2. The statutory or other authority of the person making the request; and
3. The relation of the purpose and authority to the administration of the tax laws. Only the Secretary of the Treasury or his delegate or the head of an agency will be construed as having the proper authority to make such request.
(b) With each requested examination there must also be submitted in writing the following:
1. Name and address of each taxpayer whose return is requested;
2. Type of tax return, such as income, corporate excise, estate, or sales and use tax;
3. The taxable period(s);
4. The taxpayer's social security number, in the case of returns relating to individuals, or, in the alternative, the taxpayer's federal identification number, and,
5. The representatives of such agency, other than the person making the request, who are to inspect or to receive the return on the agency's behalf.
(5) Receipt of Returns; Designated Individuals.
(a) Returns shall be open to inspection by or disclosure to any agency which has the responsibility for the administration of federal or state tax laws. Delivery of such returns shall be made, only upon written request by the head of the agency, and only to the representatives of the agency designated in such written request as the individuals who are to receive the returns on behalf of the agency.
(b) Returns shall be open to inspection by or disclosure to the Secretary of the Treasury or his delegate. Delivery of such returns shall be made, only upon written request of the Secretary of the Treasury or his delegate, and only to the representatives of the Internal Revenue Service or the Bureau of Alcohol, Tobacco and Firearms, who are designated to inspect or receive the returns on behalf of the Department of the Treasury. For the purposes of this regulation, those people designated by the Internal Revenue Service or the Bureau of Alcohol, Tobacco and Firearms pursuant to the Agreement on Coordination of Tax Administration to inspect and receive state returns will be considered delegates of the Secretary of the Treasury.
(6) Restrictions on Further Disclosure and Inspection. An agency representative who has received a return pursuant to this regulation may thereafter disclose such return only to another employee of the agency for the purpose of, and only to the extent necessary in, the administration of the tax laws for which the agency is responsible.
(7) Copies. Any person who is permitted to inspect a return under this regulation may be furnished with a copy of such return upon request. Such request shall be in writing, shall adequately identify the return and shall be accompanied by evidence that the applicant qualifies as one to whom inspection of the return may be permitted.
(8) Time and Place. A convenient time and place for the inspection of returns permitted under this regulation will be arranged by the Commissioner.
(9) Court Actions and Proceedings.
(a) The Commissioner may furnish copies of the tax returns, and any other tax information that he may deem proper, for use in court actions, proceedings or other activities, whether criminal or civil, involving the administration of tax laws of the United States or of any territory, or state, or any political subdivision thereof, if a written request has been made to the Commissioner by those designated individuals, provided that the laws of the United States, or of such territory, state, or political subdivision grant substantially similar powers. If the Commissioner authorizes the use of returns or other information then he may testify or delegate any employee to testify in such actions, proceedings or other activities in respect to such returns or other information.
(b) A return may be disclosed in a judicial or administrative proceeding, or other activity pertaining to tax administration, but only if:
1. The taxpayer is a party to such proceeding or activity and the return relates to the resolution of a tax issue in such proceeding or activity;
2. The treatment of an item reflected on such return is directly related to the resolution of a tax issue in the proceeding or activity; or,
3. Such return directly relates to a transactional relationship between a person who is a party to the proceeding or other activity and the taxpayer which affects the determination or collection of any tax.
(10) Nondisclosure. Notwithstanding any other provision of this regulation, disclosure of a return will not be made if such disclosure would identify a confidential informant or seriously impair a civil or criminal tax investigation.
(11) Redisclosure by Commonwealth. The Commissioner will restrict access to returns, received by the Department of Revenue from the United States or any territory, state, or political subdivision, or agency thereof, only to persons within the Department of Revenue and only for the purpose of administering state tax laws, and may not redisclosure such return to any other territory, state or political subdivision or to the United States.
(12) Refusal to Disclose. The Commissioner, may, in his discretion, refuse to disclose returns if there has been any unauthorized use or disclosure of such returns in the past by the agency receiving such returns.
(13) Cooperative Audits.
(a) Subject to the provisions stated herein and to the Agreement on Coordination of Tax Administration, and, within the framework of available resources, the Commonwealth and those persons and agencies who may request and receive information, as allowed by 830 CMR 62C.22.1, and may develop cooperative return selection and examination programs. Each may furnish to the other, subject to the restrictions on exchange of information, information on audit adjustments made by its officers and such other information as will assist in determining final tax liability.
(b) The parties, when feasible, will furnish each other information which will assist in locating persons whose tax accounts are delinquent or who may be entitled to a tax refund. Additionally, lists of taxpayers and other information relevant to the identification of persons who have failed to file tax returns will be exchanged.
Date of Promulgation: 2/2/78
Emergency Regulation: 12/23/85
New Regulation Promulgated: 2/5/99