830 CMR 62C.00: STATE TAX ADMINISTRATION
830 CMR 62C.00 is repealed and replaced with the following:
830 CMR 62C.37.1: Abatements
(1) Statement of Purpose; Organization
(a) Any person aggrieved by the assessment of a tax may apply in writing to the Commissioner for an abatement. The purpose of this regulation, 830 CMR 62C.37.1, is to explain how a person may apply for an abatement of tax under G.L. c. 62C, § 37.
(b) This regulation is organized as follows:
1. Statement of Purpose; Organization
3. Time for filing Application
4. Limitations on Amount of Abatement
5. Application for Abatement/Amended Return
6. Substantiation Requirements; Denial for Failure to Substantiate
7. Hearing on the Application
8. Decision on the Application
9. Abatement of Additional Tax or Penalty
(2) Definitions. For the purposes of 830 CMR 62C.37.1 only, the following terms shall have the following meanings:
Abatement, a reduction of an amount of tax that equals the difference between the amount of tax assessed as a result of an assessment or deemed assessment and the lower amount of tax properly due.
Assessment, (1) the issuance of a Notice of Assessment to a taxpayer, or the entry in the Commissioner's assessment records of an amount due from the taxpayer, if such entry predates the Notice of Assessment; or (2) the taxpayer's calculation and declaration of the tax due, as provided under M.G.L. c. 62C, § 26(a), completed on a return, or on any amendment, correction, or supplement thereto, by the taxpayer or the taxpayer's representative and duly filed with the Commissioner; provided, however, that for purposes of the time limit for the taxpayer to apply for an abatement, the date of assessment shall not be before the date of Notice of Assessment.
Commissioner, the Commissioner of Revenue or the Commissioner's designee duly authorized to perform the duties of the Commissioner.
Department, the Department of Revenue.
Return, the original tax return filed by the taxpayer for the tax year at issue.
Tax or Taxes, any tax imposed under M.G.L. chs. 60A, 62 through 65C, c. 121A § 10, and c. 138, § 21, and any penalties imposed under M.G.L. c. 62C.
(3) Time for Filing Application
(a) General Rule. An application for abatement may be filed at any time within three years from the last day for filing the return for such tax, determined without regard to any extension of time, within two years from the date the tax was assessed or deemed to be assessed, or within one year from the date that the tax was paid, whichever is later.
(b) Exception to General Rule if Commissioner and Taxpayer Agree to Assessment Extension. If the Commissioner and the taxpayer have agreed to extend the period for assessment of a tax pursuant to G.L. c. 62C, § 27, the application for abatement may be made within the assessment extension period.
(4) Limitations on Amount of Abatement
If more than three years have expired from the due date of the return , determined without regard to any extension of time, and an application for abatement is filed within two years of an assessment the Commissioner will grant an abatement up to the amount of that assessment. If the time for filing an abatement application has otherwise expired and an application for abatement is filed within one year of a payment of a portion of an assessment, the Commissioner will not grant an abatement in excess of the payment.
(5) Application for Abatement
1. Return. Any person filing an application for abatement of an assessed tax shall have filed, at or before the time of filing the application, a tax return for the period to which the application relates as required by M.G.L. c. 62C. Filing a return is not a prerequisite if the abatement application is founded on the assertion that no return is required.
2. Assessment. No application for abatement should be filed until the tax is actually assessed. Only upon actual assessment is a person "aggrieved by the assessment of a tax" within the meaning of M.G.L. c. 62C, § 37.
Example: The Commissioner determines that Vendor A has not reported fully the gross receipts from sales at retail as required by M.G.L. chs. 62C and 64H. After the return is filed, the Commissioner timely notifies A of the Commissioner's intention to make an additional assessment pursuant to M.G.L. c. 62C, § 26 (b). No assessment has actually been made. Vendor A should not file an application for abatement until and unless the tax is actually assessed by the Commissioner.
(b) Overpayments. Any person entitled to a refund or credit under M.G.L. c. 62C, § 36 because of an overpayment of tax need not file an application but may write the Department of Revenue or file an amended return to bring the overpayment to the attention of the Commissioner. (See 830 CMR 62C.40, Interest on Refunds of Overpayments).
(c) Form of Application. Except as noted in 830 CMR 62C.37.1(4)(e), infra, each claimant shall file an Application for Abatement (Form CA-6) and shall set forth, in addition to taxpayer identification,
1. the type of tax,
2. the taxable periods,
3. the amount of abatement requested, and
4. the specific facts and contentions of law relied upon. See 830 CMR 62C.37.1(6) for substantiation requirements. The claimant may file an amended return along with the application for abatement if to do so would clarify the abatement claim.
(d) Waiver of Time Limitation. Unless an applicant strikes the consent clause of the application, the filing of an application for abatement by an applicant shall act as a waiver of the right to treat the Commissioner's failure to act on the application prior to six months from the date of filing as a denial of the application pursuant to M.G.L. c. 58A, § 6 . This waiver may be withdrawn at any time in writing by the applicant, in which event the application, unless previously acted upon by the Commissioner, shall be deemed to be denied at the expiration of the six months or on the date of withdrawal, whichever is later.
(e) Change in Federal Taxable Income, Federal Tax Credits, or Federal Taxable Estate or in Tax Liability to Another State or Jurisdiction. If, as a result of a change in federal taxable income, federal tax credits, or federal taxable estate or in tax due to another state or jurisdiction, a person believes that a lesser Massachusetts tax was due than was previously assessed, the person may apply for an abatement under M.G.L. c. 62C, § 30 or M.G.L. c. 62C, § 30A, respectively, within one year of the date of notice of final determination as provided under those statutes, or under M.G.L. c. 62C, § 37, and this regulation, 830 CMR 62C.37.1, within the limits established under 830 CMR 62C.37.1(3) and (4), supra.
If the Commissioner has assessed an additional tax as a result of a change in the taxpayer's federal taxable income, federal tax credits, or federal taxable estate, or as a result of a change in tax liability to another state or jurisdiction, the taxpayer may file an application for abatement of such tax within the limits established under 830 CMR 62C.37.1(3) and (4), supra.
(f) Stay of Involuntary Collection. The filing of an application for abatement shall stay involuntary collection of the disputed portion of tax imposed by M.G.L. chs. 62, 63, 64A through 64F, 64J through 65C, and by M.G.L. c. 138, § 21 and trustee taxes imposed by M.G.L. c. 62B and by M.G.L. c. 64G through 64I, provided that the taxes imposed under these chapters were not withheld by the employer or collected by the vendor. The statute of limitations for collection of taxes in M.G.L. c. 62C, § 65, and the date of termination of tax liens in M.G.L. c. 62C, § 50, is extended by the period that collection of the tax is stayed by M.G.L. c. 62C, § 32(e). Interest and penalties under M.G.L. c. 62C, §§ 33(a) and 33(b) will continue to accrue. The stay expires on the date on which any right of appeal from a refusal or deemed refusal by the Commissioner to grant an abatement of such tax expires without any appeal to the ATB or the probate court having been filed, or as otherwise provided in M.G.L. c. 62C, § 32(e).
(g) Multiple Claims.
1. A taxpayer shall file a separate application for abatement of each tax, excise or additional assessment or portion thereof for each taxable period; however, where the tax is due on other than an annual basis the taxpayer may file one application combining taxable periods of each calendar year. Thus, a vendor who files sales and use tax returns on a monthly basis may combine in one application taxes assessed for each of the twelve months in a calendar year. If different issues are raised on the combined application, the application must clearly specify which issues are related to each of the periods.
2. A taxpayer should combine all challenges to an assessment in a single abatement application. However, a taxpayer may file a subsequent application for abatement concerning the same tax and taxable period as a previous application so long as the taxpayer intends to challenge a portion of the tax different from that challenged in the previous application. A taxpayer may not file a second application for abatement which puts in issue the identical item of tax for a given period as challenged in a previous application.
The following list illustrates but does not exhaust situations in which a timely second abatement application, concerning the same tax and taxable period as a previous application, would be considered by the Commissioner:
a. The first application from a domestic business corporation challenges an assessment resulting from a final determination by the federal government of a change in the corporation's net taxable income due to disallowance of entertainment expenses, and the second application challenges apportionment of the corporation's net income.
b. The first application (filed along with an amended return) challenges an assessment based on under reporting the number of dependents on a personal income tax return, and the second application (also filed with an amended return) challenges the assessment based on an understatement of the taxpayer's social security deduction.
c. The first application from an executor liable for the M.G.L. c. 65C estate tax challenges a determination of the value of decedent's real estate and the second application challenges the value of decedent's closely held business.
(While the Commissioner would entertain a second application in each of the preceding instances, the proper procedure in each case would have been to combine both claims in one application if the information was available at the time of the first application).
The Commissioner would not consider a later application for abatement in the following illustrative cases:
a. Taxpayer fails to file an appeal to the Appellate Tax Board within 60 days of the denial of the abatement and, in an attempt to revive the taxpayer's lapsed right of appeal, files an identical second application for abatement with the Commissioner.
b. The first application challenges the Commissioner's interpretation of M.G.L. c. 62 as imposing a tax on interest from New York City bonds, the second application requests an abatement of the tax on the same interest on the ground that the statute is unconstitutional.
(6) Substantiation Requirements; Denial For Failure to Substantiate
(a) Substantiation Generally.
1. A taxpayer applying for an abatement shall attach all supporting information, documents, explanations, arguments and authorities that will reasonably enable the Commissioner to determine whether the applicant is entitled to the abatement amount requested.
2. The applicant shall not be considered to have submitted a completed written abatement application until the date on which all such information reasonably requested from the applicant and reasonably necessary for a decision, including the amount of abatement claimed and the factual and legal basis for claiming an abatement, has been furnished to the Commissioner.
3. If the Commissioner has made a written request to the applicant for additional information, not then contained in the taxpayer's pending abatement application, and the applicant fails to provide such information within 30 days after such request, or within any extended period allowed by the Commissioner, that application shall be considered incomplete and shall be denied without prejudice to its timely renewal.
4. The Commissioner shall give such applicant written notice that the denial is based upon the lack of sufficient information to grant the taxpayer's abatement application.
5. Following a denial of an unsubstantiated abatement application, the taxpayer may file a new, properly substantiated abatement application within the time limitations of this regulation, 830 CMR 62C.37.1, and M.G.L. c. 62C, § 37, without regard to the prior filing, or in the alternative, may appeal to the Appellate Tax Board or the probate court on the merits within the time limitations of M.G.L. c. 62C, § 39.
6. The Department will not act on an abatement application made after denial of an unsubstantiated abatement application if:
a. The application does not contain information previously requested by the Department;
b. the application contains the same information submitted with the prior filing without additional information; or
c. the application is filed after the taxpayer has appealed to the Appellate Tax Board or probate court.
7. The time for perfecting an appeal to the Appellate Tax Board or the probate court in the situations described in 830 CMR 62C.37.1(6)(a)6.a. and b. is from the date of the Department's first denial of an unsubstantiated abatement application and not from the denial of any later filed application. Documentation provided in connection with an appeal to the Appellate Tax Board or probate court is not considered substantiation of an abatement application.
8. The substantiation requirements of M.G.L. c. 62C, § 37, and this regulation, 830 CMR 62C.37.1, do not preclude a taxpayer from amending a pending, timely filed abatement application to add additional claims based on new legal precedent not available to the taxpayer at the time the application was filed.
(b) Substantiation of Refund to Purchaser
If the person filing an application for abatement is an operator subject to the room occupancy excise as defined in M.G.L. c. 64G, § 1 or a vendor subject to the sales or use tax as defined in M.G.L. c. 64H or c. 64I, § 1 no refund of money shall be made until the operator or vendor establishes , to the satisfaction of the Commissioner, that it has repaid or credited or will repay or credit any purchaser who has paid the tax to the operator or vendor in the amount for which the application is made. The repayment or credit to the purchaser must include all interest paid pursuant to M.G.L. c. 62C, § 40, unless the vendor or operator actually repaid or credited the purchaser the amount in question prior to filing the abatement application. An operator or vendor may use any reasonable method to allocate interest among purchasers that is supported by its books and records.
(7) Hearing on the Application
Any person seeking an abatement may request a hearing upon the application either in the application itself or by separate written request made before the Commissioner has acted upon the application. The hearing shall be set down for a specific date and the applicant shall be given notice thereof in writing at least ten days before the hearing. Effective with abatement applications filed on or after July 1, 2003, a person will be entitled to either a pre-assessment hearing under M.G.L. c. 62C, § 26(b) or an abatement hearing under M.G.L. c. 62C, § 37, but not both. An exception to this one-hearing rule will be made if there is new factual information or new legal precedent that was not available at the time of the pre-assessment hearing or the taxpayer raises a new issue not considered at the pre-assessment hearing.
(8) Decision on the Application
If the Commissioner finds that the tax is excessive in amount or illegal, the tax shall be abated in whole or in part, accordingly.
The Commissioner shall mail or deliver written notice of the decision to grant or deny the abatement application to the taxpayer or the taxpayer's representative. The taxpayer may appeal from the Commissioner's decision within 60 days of the date of notice of the decision in accordance with M.G.L. c. 62C, § 39.
(9) Abatement of Additional Tax or Penalty
Refer to M.G.L. c. 62C, § 33 and 830 CMR 62C.33.1, on Interest, Penalties, and Application of Payments, for information on abatement of penalties and interest.
830 CMR 62C.37.1: M.G.L. c. 14, § 6(1); c. 62C, § 3, c. 62C, § 37.
Abatements (old number 62C.37)
New Regulation Promulgated: 11/3/06