For purposes of 830 CMR 62C.24A.1, the following terms have the following meanings.
Affected Item, an item on the member’s return that is not a pass-through entity item, but one that is affected by adjustments to the tax treatment of a pass-through entity item.
Commissioner, the Commissioner of Revenue.
Computational Adjustment, adjustment to a member’s return and assessment or reduction of tax in order to take into account unified audit results on pass-through entity items and affected items.
Department, the Massachusetts Department of Revenue.
Direct Member, a person or entity reporting or required to report or otherwise entitled to a distributive share of an item from a source pass-through entity of which the person or entity is a partner, S corporation shareholder, or beneficiary. There are no pass-through members between a direct member and the source pass-through entity.
Indirect Owner, a person or entity reporting or required to report or otherwise entitled to, through one or more pass-through members in a tiered structure, a distributive share of an item originating with a source pass-through entity which passes through one or more pass-through members that directly or indirectly have an ownership interest in the source pass-through entity. Unless otherwise specified in 830 CMR 62C.24A.1, the term Member encompasses indirect owners.
Member, a person or entity reporting or required to report or otherwise entitled to a distributive share of an item from a pass-through entity, including indirect owners and pass-through members.
Non-unified Audit Pass-through Items, a member’s pass-through entity items that are not included in a unified audit proceeding due to:
a) a member’s election not to participate in the unified audit proceeding (see 830 CMR 62C.24A.1(6)(a)); or
b) the Commissioner’s decision to exclude a member from the unified audit (see 830 CMR 62C.24A.1(6)(b)).
Notice Member, a direct member to which the Commissioner will provide information regarding the commencement of a unified audit under 830 CMR 62C.24A.1(9)(b), if the Tax Matters Partner has timely provided the Commissioner with the necessary information as required under 830 CMR 62C.24A.1(10)(d).
Partnership, an entity, including, without limitation, a general partnership, a limited partnership, a limited liability partnership, a limited liability company, or any other entity, that in each case is treated as a partnership under M.G.L. c. 62 or 63 for the tax period or periods at issue.
Pass-through Entity, an entity whose income, gains, losses, deductions or credits pass through to members for Massachusetts tax purposes, including a partnership, an S corporation, or a trust.
Pass-through Entity Items, items of income, gain, loss, deduction or credit that originate with a pass-through entity. In addition, items more appropriately determined at the pass-through entity level than at the member level, such as entity-level penalties, additions to tax or additional amounts relating to adjustment of pass-through entity items, may be treated as pass-through entity items under 830 CMR 62C.24A.1.
Pass-through Member, a pass-through entity in a tiered structure through which indirect owners hold an interest in a source pass-through entity with respect to which unified audit proceedings are conducted.
S Corporation, any corporation for which an S corporation election under Internal Revenue Code section 1362(a) is in effect for the taxable year subject to unified audit.
Source Pass-through Entity, in a tiered structure, the originating pass-through entity of an item of income, gain, loss, deduction or credit that passes to an indirect owner. A reference in 830 CMR 62C.24A.1 to the “source pass-through entity” refers to the entity with respect to which unified audit proceedings are conducted, and which receives the Notice of Unified Audit.
Tax Matters Partner, the member designated to represent a pass-through entity in unified audit proceedings. The Tax Matters Partner has the power, on behalf of a pass-through entity’s members, to enter into settlements or extensions of the period of limitations on determinations, and has duties of representation and notice as specified in 830 CMR 62C.24A.1(10), similar to, but not restricted by, the powers and duties specified to the Tax Matters Partner under TEFRA.
Tiered Structure, an entity ownership structure in which a pass-through entity is a member of another pass-through entity.
Unified Audit, the Commissioner’s conduct of an audit of a pass-through entity and its members, with respect to pass-through entity items and affected items, under audit and appeal procedures pursuant to M.G.L. c. 62C, § 24A, and 830 CMR 62C.24A.1.