I. Introduction

This Technical Information Release ("TIR") revises the Massachusetts Department of Revenue ("Department") requirements for acceptable computer-generated tax returns and supporting schedules for filing, as originally prescribed in TIR 87-12. It discusses the procedures that must be followed by tax preparation businesses and others who provide computer-generated preparation of official Massachusetts Resident Income Tax Returns, Form 1 and Form ABC.

Section II spells out the additional new requirements applicable to tax preparation businesses preparing, designing, or printing Massachusetts Resident Income Tax Returns and related schedules for filing with the Department ("tax preparation businesses"). Section III outlines the consequences of using a computer-generated form that does not meet the requirements of this TIR. Other than the specific details in this TIR that revoke or modify Sections III and V of TIR 87-12, this TIR does not modify TIR 87-12.

II.Specifications and Conditions for Computer-Generated Form 1 and Form ABC for the 1989 Taxable Year and Thereafter

1. All tax preparation businesses that prepare computer- generated Massachusetts Resident Income Tax Returns and related schedules must provide the option of either Form 1 or Form ABC for taxpayers and tax practitioners for returns for taxable years ending on or after December 31, 1989.

2. Tax preparation businesses must inform tax practitioners and taxpayers that Form ABC is available to taxpayers who:

a. were Massachusetts residents for the entire taxable year;

b. were single or married filing a joint return;

c. had income after deductions and exemptions of $80,000 or less; and

d. only had income from the following sources: wages; pensions and annuities;

interest from Massachusetts banks or similar institutions; fees; alimony; unemployment compensation; winnings, prizes, or awards.

3. Tax preparation businesses must inform tax practitioners and taxpayers that Form ABC is not available to taxpayers who:

a. were Massachusetts residents for only part of the taxable year;

b. were married filing a separate return;

c. had income after deductions and exemptions of more than $80,000;

d. are submitting an M-2210 payment, for underpayment of estimated tax, with the return;

e. are eligible for renewable energy credits, lead paint credits, or credits for income taxes paid to other jurisdictions;

f. are eligible for deductions for business expenses, alimony paid, early savings withdrawal penalties, or self-employed health insurance; or

g. had income from any of the following sources: a trade, business, or profession; rents; royalties; partnerships; S corporations; trusts; REMICs; interest from banks or similar institutions outside Massachusetts; dividends; or capital gains.

4. Each tax preparation business must register with and obtain an identifying code from the Department before the Department will accept any 1989 computer-generated Massachusetts Resident Income Tax Returns the business has prepared. All computer-generated Massachusetts Resident Income Tax Returns must show the tax preparation business's identifying code immediately above the form number. The identifying code allows the Department to contact the tax preparation business if the Department finds an error or omission on the returns or accompanying schedules.

To register with the Department, tax preparation businesses should write:

Massachusetts Department of Revenue
Bureau of Analysis, Estimation and Research
100 Cambridge Street Room 800
Boston, Massachusetts 02204
Attention: Chief of Bureau.

5. Any tax preparation business that reasonably believes it is unable to follow the guidelines set forth above for the 1989 tax returns must notify the Department and request the Commissioner's approval to waive the requirements of TIR 89-9 for the 1989 tax returns. The tax preparation business must send a letter containing all relevant information as to why, due to hardship or other exceptional circumstances, it cannot meet the requirements of TIR 89-9, to:

Massachusetts Department of Revenue
Bureau of Analysis, Estimation and Research
100 Cambridge Street Room 800
Boston, Massachusetts 02204
Attention: Chief of Bureau.

The Department must receive the written request for a waiver by December 15, 1989, to allow the Department sufficient time to consider and answer the request before the filing of 1989 tax returns. Any waiver granted will be in writing and effective only for computer-generated tax returns for taxable years ending before December 31, 1990. The Department will not grant waivers in person or over the telephone.

III. Consequences of Failing to Follow These Guidelines

The Department reserves the right to reject any computer- generated Massachusetts Resident Income Tax Returns prepared by any tax preparation business that does not follow the rules in this TIR. Rejection of returns or supporting schedules for failure to meet these standards may subject taxpayers to late penalties and/or interest charges, under G.L. c. 62C, §§ 32, 33.

Stephen W. Kidder
Commissioner of Revenue

November 7, 1989

TIR 89-9