MASSACHUSETTS DEPARTMENT OF REVENUE REGULATION FACT SHEET

TITLE: 830 CMR 62C.33.1: Interest, Penalties, and Application of Payments

REGULATORY HISTORY: Regulation promulgated 2/2/78 (old number 62C.33), New Regulation promulgated 4/23/93, Amended 10/8/04, Amended 5/4/07.

SUMMARY OF REGULATION: This Regulation explains the computation of interest and penalties that accrue on unpaid taxes and the interest paid on refunds of tax. This Regulation, in particular:

  • defines relevant terms including "Amount of tax required to be shown," "Amount of tax shown," "Assessment," "Date prescribed for payment," "Involuntary payment," "Notice of Intention to Assess," "Notice of Assessment," "Statutory due date," "Valid extension of time to file," and "Valid extension of time to pay;"
  • explains how the rate of interest assessed on unpaid taxes is determined;
  • explains how interest accruing on unpaid taxes is calculated and how it is reflected on a Notice of Assessment;
  • explains the calculation of penalties that may be assessed for a) failure to timely file a return, b) for failure to timely pay tax due and, c) failure to timely pay an amount shown due on a Notice of Assessment;
  • explains that interest accrues on unpaid penalties;
  • explains how the rate of interest paid on overpayments is determined and how it is assessed;
  • explains the methods a taxpayer may use to direct voluntary payments to particular assessments;
  • explains how voluntary payments are applied to outstanding liabilities in the absence of taxpayer directions;
  • explains the procedures for waiving and for abating penalties while explaining that the Commissioner may not waive or abate interest that is properly assessed.

  • 10/8/04 Amendment: The purpose of this amendment was to update the regulation to reflect statutory changes to G.L. c. 62C that were previously announced by the Department in Technical Information Release 03-18. Those statutory changes reduce the interest rate paid by the Department to the federal short term rate plus two percentage points, reduce the period for which interest is paid when an abatement is granted, and eliminate interest on an abatement where the taxpayer's return does not agree with information from third party sources or DOR records. The statutory changes were effective 7/1/03.

  • 5/4/07 Amendment: The purpose of this amendment was to update the regulation to incorporate new penalty provisions that were enacted as part of chapter 163 of the acts of 2005 and contained in M.G.L. c. 62C, § 35A-35E. The new penalties contain provisions pertaining to inconsistent filing positions, substantial understatement of tax liabilities and penalties for return preparers and promoters of abusive tax shelters. There are also revisions to subsections 5(b) and 5(c) of the regulation pertaining to the failure to report federal and state changes. The statutory changes were effective 12/8/05.

AUTHORITY: Pursuant to authority granted the Commissioner by G.L. c. 14, § 6(1); G.L. c. 62C, § 3.

PREPARED BY:

Massachusetts Department of Revenue

Rulings and Regulations Bureau

100 Cambridge Street, 7 th floor

Boston, Massachusetts 02114

(617) 626-3250