I. Introduction

The Legislature has authorized the Commissioner of Revenue to establish a three-month amnesty period for certain nonfilers, namely, nonresidents who have failed to file an individual income tax return, foreign corporations which have failed to file a corporate excise return, and persons who have failed to report a use tax liability.

Under this legislation if an eligible taxpayer files all required returns and pays the tax and interest due for taxable years beginning after January 1, 1986 and on or before January 1, 1992 [1], and in the case of use tax liabilities, for returns due after January 1, 1986 and on or before January 1, 1992, and properly and timely files a Request for Amnesty Form, the Commissioner will waive penalties imposed under G.L. c. 62C associated with the tax due for those taxable periods.

When an eligible taxpayer files returns and pays tax and interest due for the years described above, the Commissioner will forego the assessment of tax as to that taxpayer for all tax years beginning on or before January 1, 1986 and in the case of use tax liability for returns due on or before January 1, 1986. The agreement to forego assessment of tax will apply to only the type(s) of tax for which the taxpayer has filed returns under the amnesty program.

II. Special Filing Period

The Commissioner has established the "Special Filing Period" to begin on September 18, 1993 and to end on December 17, 1993.

III. Eligibility

The Commissioner will grant amnesty to any taxpayer who properly completes and files a "Request For Amnesty" Form, with all required tax returns, during the Special Filing Period if the taxpayer is eligible for amnesty and pays the required amounts of tax and interest in full.

A. Taxpayers Eligible for Amnesty

The following taxpayers are eligible to apply for amnesty:

A nonresident individual with Massachusetts source income [2] if the nonresident has not filed a return required to report such income in at least one of the taxable years beginning after January 1, 1986 and on or before January 1, 1992. A nonresident is ineligible if the nonresident has filed the required returns in all of the taxable years during such period.

A foreign corporation subject to the Massachusetts corporate excise if the corporation has not filed a return required to report such excise in at least one of the taxable years beginning after January 1, 1986 and on or before January 1, 1992. A foreign corporation is ineligible if the corporation has filed the required corporate excise returns in all of the taxable years during such period.

A person [3] who has failed to report a use tax due for any item of tangible personal property or service on a return due after January 1, 1986 and on or before January 1, 1992.

Note that, use tax due on returns due after January 1, 1986 would include returns for monthly or quarterly filers that were due in 1986 reflecting purchases made in the last month or quarter in 1985, respectively, and returns for annual filers due April 15, 1986 reflecting purchases made during all of 1985 subject to use tax.

If such nonresident individual, foreign corporation or person is eligible for amnesty under more than one of the three tax types of amnesty, the taxpayer must seek amnesty under all such eligible tax types.

B. Payment in Full

A nonresident individual or foreign corporation taxpayer must make a full payment of income or corporate taxes and interest due as well as any applicable estimated tax penalties, for all taxable years beginning after January 1, 1986 and on or before January 1, 1992. A person must make a full payment of use taxes and interest due on all taxable purchases of tangible personal property and services for returns due after January 1, 1986 and on or before January 1, 1992. Persons making such full payments of use tax will be required to file annual use tax returns with the Request For Amnesty Form even though such purchases may have been for returns due on a monthly or quarterly basis.

If such nonresident individual, foreign corporation or person is eligible for amnesty under more than one of the three tax types of amnesty, the taxpayer must make a full payment of all taxes and interest due on all such eligible tax types.

For further information regarding the computation of interest refer to the interest tables in the instructions to the Request For Amnesty Form and the Interest, Penalties, and Application of Payments regulation. 830 CMR 62C.33.1.

If a taxpayer cannot precisely determine the total amount of interest due as well as any applicable estimated tax penalties, the taxpayer shall estimate the amount in good faith, and pay the estimated amount with the Request for Amnesty Form. The Commissioner will notify the taxpayer of any balance due. Any balance determined by the Commissioner to be due must be paid within 30 days from the date of the notice of assessment of such balance from the Commissioner or amnesty will not be granted.

The request for amnesty will be regarded as timely if the required payment, Request For Amnesty Form and returns are received by the appropriate office of the Department of Revenue as designated on the Request for Amnesty Form by 5:00 p.m., December 17, 1993. In addition, if an application is delivered by U.S. mail (or a recognized commercial delivery service) to the appropriate office after December 17, 1993, the request for amnesty will be considered timely if the date of the U.S. postmark (or other substantiating date mark) is on or before December 17, 1993.

IV. Scope of Limited Amnesty

A. Penalty Amnesty

If a taxpayer qualifies for amnesty for a particular tax, the Commissioner will waive all penalties under G.L. c. 62C, including the failure to file and failure to pay penalties, associated with such tax type for taxable years beginning after January 1, 1986 and on or before January 1, 1992 and in the case of use tax liability for returns due after January 1, 1986 and on or before January 1, 1992 for which amnesty is granted. Interest and any applicable estimated tax penalties cannot be waived.

B. Assessment Amnesty

If a taxpayer is granted penalty amnesty for a particular tax, the Commissioner will agree to forego the assessment of that tax type for taxable years beginning on or before January 1, 1986 and in the case of use tax liability for returns due on or before January 1, 1986.

C. Criminal Investigation and Prosecution

If a taxpayer is granted amnesty by the Commissioner, the Commissioner will not initiate criminal investigation of that taxpayer nor refer the taxpayer's case to the Department of the Attorney General or Massachusetts District Attorneys for criminal prosecution for the tax and tax period(s) covered by the grant of amnesty.

V. Disqualification Based on Prior Assessment

A taxpayer will not qualify for amnesty for any period upon which a Notice of Assessment has been issued before the taxpayer's Request For Amnesty Form together with the required payment and returns is received by the appropriate office of the Department of Revenue as designated on the Request for Amnesty Form.

Example 1:

A calendar year foreign corporation subject to the Massachusetts corporate excise has failed to file required returns for all taxable years beginning after January 1, 1986, and on or before January 1, 1992. The corporation's Request For Amnesty Form together with the required payment and returns is received on September 22, 1993 by the appropriate office of the Department of Revenue. A Notice of Assessment, dated June 24, 1993 was issued for the 1987, 1988 and 1989 calendar years and an additional Notice of Assessment, dated October 5, 1993 is issued for the 1990 calendar year. The foreign corporation is disqualified for amnesty for penalties accruing on the liabilities for the 1987, 1988 and 1989 taxable years but can qualify for penalty amnesty for penalties accruing on the liabilities for the 1990 through 1992 taxable years and for assessment amnesty for taxable years beginning on or before January 1, 1986.

Example 2:

A calendar year nonresident individual with Massachusetts source income has failed to file required returns for the 1987 through 1989 taxable years. The taxpayer's Request For Amnesty Form together with the required payment and returns is received on September 24, 1993 by the appropriate office of the Department of Revenue. A Notice of Assessment, dated July 23, 1993 is issued for the 1987 and 1988 taxable years. The nonresident taxpayer is disqualified for penalty amnesty for the 1987 and 1988 taxable years but can qualify for penalty amnesty for the 1989 taxable year and for assessment amnesty for taxable years beginning on or before January 1, 1986.

Example 3:

A person, who is required to file sales tax returns on a quarterly basis, has failed to report on such returns the use tax due for items of tangible personal property purchased in January and December of 1985. The person's Request For Amnesty Form together with the required payment and returns is received on September 20, 1993 by the appropriate office of the Department of Revenue. A Notice of Assessment, dated September 8, 1993 was issued for that particular December, 1985 purchase. The person is disqualified for penalty amnesty for that particular December, 1985 purchase since a Notice of Assessment for the December purchase has been issued before the person files for amnesty, and the person is not eligible for penalty amnesty based on a January, 1985 purchase reportable in the first quarter of 1985. Since no penalty amnesty is granted, the person is also disqualified for assessment amnesty for the January, 1985 purchase.

VI. Verification and Assessment

Any tax return filed under the amnesty program is subject to verification and assessment as provided by statute. If the taxpayer files a false or fraudulent or misrepresented tax return or attempts in any manner to defeat or evade a tax under the amnesty program, the Commissioner may rescind the grant of amnesty and subject the taxpayer to applicable civil penalties and criminal prosecution.

VII. Abatements

Participation in the amnesty program and payment of the tax, interest and any applicable estimated tax penalties, does not constitute a forfeiture of statutory rights of appeal or an admission of liability for the assessment.

VIII. Disclosure

No return or document filed with the Commissioner under the Amnesty program will be subject to disclosure except as provided in G.L. c. 62C, § 21.

IX. Information and Forms

To request further information or Request For Amnesty Forms and related returns, call (617) 727-0939.

Or write to:

Amnesty
Massachusetts D.O.R.
P.O. Box 7048
Boston, MA 02204

Amnesty forms and information also can be obtained through DOR's Fax on Demand system. Please call (617) 727-2123 from the handset on your fax machine for a complete menu of available documents.

/s/Mitchell Adams
Mitchell Adams
Commissioner of Revenue

MA:HMP:jmw

September 10, 1993

TIR 93-9



[1] For example, calendar year taxpayers would have to file all the required returns and pay all the tax and interest due for the six taxable years of 1987 through 1992.

[2] Massachusetts source income includes a partner's distributive share of the income received by the partnership to the extent that the partnership income is Massachusetts source income. For further information regarding what constitutes Massachusetts source income refer to the Non-Resident Income Tax regulation. 830 CMR 62.5A.1.

[3] A "person" is defined as "an individual, partnership, trust or association, with or without transferable shares, joint-stock company, corporation, society, club, organization, institution, estate, receiver, trustee, assignee, or referee, and any other person acting in a fiduciary or representative capacity, whether appointed by a court or otherwise, and any combination of individuals acting as a unit." G.L. c. 64H, § 1.