Introduction: In 2015, the Department of Revenue (DOR) implemented a new process for filing amended returns and applications for abatement for business tax types in conjunction with the implementation of MassTaxConnect (MTC). As explained in TIR 15-13, in most cases an amended return is no longer treated as an application for abatement for business tax types. However, in certain instances an amended return showing a reduction of tax may be treated by DOR as an application for abatement to protect the rights of the taxpayer and to allow DOR adequate time to review the changes sought. See Section IV of TIR 15-13. This TIR establishes a consent process that will further protect a taxpayer’s appeal rights in cases where a taxpayer’s amended return is treated by DOR as an application for abatement.
I. Statement of Purpose
The purpose of this TIR is to explain how a taxpayer consents to extend the time for the Commissioner to act beyond six months in the case of an amended return treated as an application for abatement. Currently, this TIR only impacts amended returns for business tax types but it is anticipated that all tax types will follow the same process by the end of 2016.
II. Pre-TIR 15-13 Procedure
Prior to the changes announced in TIR 15-13 issued in 2015, a taxpayer who sought to reduce a previously assessed business tax type filed a Form CA-6, Application for Abatement/Amended Return. The CA-6 form had specific language stating that by filing the application the taxpayer granted the Commissioner consent to act beyond a statutory six month period. The statute, G.L. c. 58A, § 6, states that all applications for abatement must be acted on by the Commissioner in six months or they are deemed denied, but, a taxpayer may grant the commissioner written consent to act beyond the six months to avoid the deemed denial. This consent could be withdrawn by the taxpayer at any time. The application for abatement also allowed the taxpayer to indicate if the taxpayer did not want to grant the consent. The new Form ABT, Application for Abatement, for business tax types has the same language and follows the same process as the Form CA-6. This TIR addresses how this consent will be granted and/or withdrawn on an amended return treated as application for abatement.
III. Post-TIR 15-13 Procedure
Pursuant to TIR 15-13, an amended return for business tax types showing a reduction in self‑assessed tax generally is no longer treated by DOR as an application for abatement. Since it is no longer an application for abatement, the six month limitation in G.L. c. 58A, § 6 does not apply. However, in limited circumstances, as described in Section IV of TIR 15-13, the Commissioner may treat an amended return showing a reduction of tax as an application for abatement to allow adequate time for review and to protect a taxpayer’s abatement and appeal rights.
Once an amended return is treated as an application for abatement it becomes subject to the six month limitation. As stated above, under G.L. c. 58A, § 6, an application for abatement will be deemed denied if no action is taken on the application by the Commissioner within six months of its filing and if the taxpayer has not consented to extend the period for the Commissioner to act (as described below). Upon a deemed denial, the taxpayer has six months from the date of the deemed denial to file a petition with the Appellate Tax Board (ATB). To avoid this potential deemed denial, a taxpayer must grant the Commissioner consent to act on the application for abatement beyond the initial six-month period following its filing. Such consent may be withdrawn by the taxpayer at any time, in which case the application is deemed denied upon the later of such withdrawal or the expiration of the initial six-month period.
IV. New Consent Process – Consent is Effected by Filing an Amended Return
For amended returns filed on or after the issuance of this TIR, the act of filing an amended return, either electronically or on paper, will be considered the taxpayer’s written consent to grant the Commissioner additional time to act on an amended return treated as an abatement application. The instructions to the yearly tax form will provide further notice to taxpayers about this process and the instructions will be available to all filers on DOR’s website www.mass.gov/dor.
Such consent, unless withdrawn, will enable the Commissioner to act on the deemed abatement application beyond the initial six-month period from the date of its filing. This process will be consistent with the consent granted when a Form ABT, Application for Abatement is filed. A taxpayer may withdraw such consent at any time by contacting the DOR in writing, in which case the deemed denial rule in G.L. c. 58A, § 6 would apply. For further information on how to withdraw consent please go to www.mass.gov/dor/amend.
/s/Michael J. Heffernan
Michael J. Heffernan
Commissioner of Revenue
November 17, 2016