Robert R. Bliss
DOR amnesty program for individual taxpayers to run from March 1 to April 30th; Penalties will be waived if taxes are paid in full by April 30th for the period(s) assessed
The Massachusetts Department of Revenue today unveiled the details of a two-month amnesty campaign designed to benefit individual taxpayers who have previously received notice from DOR of an outstanding tax liability.
The average dollar amount of penalties to be waived during the amnesty is about $779, but DOR will give thousands of taxpayers with penalties of less than $100 the opportunity to take advantage of this program as well. DOR has estimated the amnesty plan could generate $10 million to $20 million in tax collections in FY09.
"This is the right time for such a program. Taxpayers could use some relief and it's no secret the Commonwealth needs revenue at a time when budgets are being cut," said DOR Commissioner Navjeet K. Bal. Only taxpayers who receive the special amnesty tax bills starting next week will be eligible for the amnesty program, which will be available for unpaid personal income tax, personal use tax and cigarette excise liabilities for tax years ending on or before Dec. 31, 2007.
The amnesty will run from March 1 to April 30 but will not extend to corporations who already owe back taxes or who have failed to file tax returns, or to anyone who prior to the start of the amnesty was the subject of a tax-related criminal investigation or prosecution.
Only taxpayers who receive the special amnesty tax bills are eligible for the amnesty program, Bal emphasized. The amnesty will provide the opportunity to pay back taxes without having to pay penalties that may account for 20 percent or more of an unpaid tax bill. The bills will be mailed to an estimated 159,000 taxpayers.
During the amnesty period DOR will waive all unpaid penalties previously assessed if full payment of back taxes and any interest due is made in response to amnesty tax bills. These bills will show the individual period balance, amount of unpaid penalty waived if the amnesty balance is paid in full by the due date, and the amnesty amount due. Until the amnesty balance is paid in full, DOR collection actions which include the authority to lien, levy and seize assets and suspend licenses will continue on a taxpayer's account. Any payments received after the April 30 deadline will not receive the Amnesty Waiver.
Bal said the amnesty plan, which was originally proposed in the Legislature and then signed by Gov. Deval Patrick on January 7, folds into DOR's overall approach in dealing with taxpayers who fall behind on tax payments.
"In the case of this amnesty, we are in essence conducting an outreach campaign to the small minority of taxpayers each year who still have not paid their income tax bill in full. If they come forward and pay all tax and interest by April 30, we are offering the benefit of elimination of unpaid penalties," Bal said.
The easiest way to pay the amnesty notice is online through DOR's Web Services for Income at www.mass.gov/dor. Online payments may be made electronically. When making an online payment, taxpayers should make sure to enter the "bill number" listed in the upper right hand corner of the amnesty notice or, if paying by check through the mail, taxpayers must complete and attach the coupon from their Amnesty Tax Notice.
Taxpayers with questions should visit www.mass.gov/dor for more information about the amnesty program or call 617-887-6367 or toll-free in Massachusetts 1-800-392-6089.
Nearly 20,000 taxpayers who have previously entered into authorized payment agreements with DOR may use the amnesty bill to pay off their amnesty balance due for any period and as a result not have to pay penalty costs. However, if a taxpayer cannot pay any period in full, they must continue to make their payments as authorized under their payment agreement with DOR.
The amnesty legislation called for the commissioner to determine a two-month amnesty period for a period to expire not later than June 30. Commissioner Bal chose the March-April period to give DOR the chance to fully account for payments received before the fiscal year ends June 30. The program applies to liabilities for taxable year of periods ending on or before Dec. 31, 2007.
Taxpayers who have paid all tax and interest due relating to any outstanding assessment but who, at the start of the amnesty period, still owe or are properly disputing penalties with regard to that assessment are not eligible for amnesty for the tax period(s) covered by the assessment.
"We recognize that taxpayers are facing difficult economic times. It is important for taxpayers to pay their tax obligations on time to avoid accruing penalties and interest. Those individuals and businesses not eligible for this amnesty program but which have outstanding tax obligations and are facing economic hardship should contact the Department at the earliest possible time. In many cases, we can work with the taxpayer to set up a payment agreement that takes into account how much they owe and how much they can realistically pay on a monthly basis to address their tax obligations," Bal said.
For more information on the Department's programs for taxpayers facing payment and other financial problems, please go to Programs and Services under the For Individuals and Families or For Businesses tab at www.mass.gov/dor.
DOR's Technical Information Release on the amnesty program is attached.