Technical Information Release  TIR 01-5: Statute of Limitations for Abatement Applications

Date:	05/31/2001
Organization:	Massachusetts Department of Revenue
Referenced Sources:	Massachusetts General Laws

Tax Administration

I. Introduction

The Department is issuing this Technical Information Release (TIR) in response to the recent decision by the Supreme Judicial Court (SJC) in EMC Corporation v. Commissioner of Revenue, 433 Mass. 568 (March 22, 2001). This decision affects the two year statute of limitations period under G.L. c. 62C, § 37 for applying for an abatement of tax that has been assessed by the Commissioner. Under G.L. c. 62C, § 37,

any person aggrieved by the assessment of a tax, other than a tax assessed under chapters sixty-five or sixty-five A, may apply in writing to the commissioner, on a form approved by him, for an abatement thereof at any time within three years from the last day for filing the return for such tax, determined without regard to any extension of time, within two years from the date the tax was assessed or deemed to be assessed, or within one year from the date that the tax was paid, whichever is later (emphasis added)….

II. Discussion

EMC Corporation (Taxpayer) received a Notice of Assessment dated March 16, 1990, reflecting an assessment made on March 2, 1990 by the Commissioner pursuant to G.L. c. 62C, § 26(b), of additional corporate excise taxes for 1985. On March 5, 1992, Taxpayer filed an application for abatement with the Commissioner pursuant to G.L. c. 62C, § 37. The Commissioner took no action on the application for abatement and it was deemed denied. Taxpayer appealed the denial to the Appellate Tax Board (ATB). The ATB dismissed Taxpayer's appeal on the ground that it lacked jurisdiction because Taxpayer had not filed its application for abatement within two years from the date the tax was assessed, as required under G.L. c. 62C, § 37. Taxpayer subsequently appealed the decision of the ATB to the Appeals Court and the SJC transferred the matter for hearing on its own motion. Taxpayer argued that the two year statute of limitations period should not begin to run from the date of assessment by the Commissioner but from the date a Notice of Assessment is sent by the Commissioner. The SJC reversed the ruling of the ATB that it lacked jurisdiction and remanded the case to the ATB for a hearing on the matter.

In its decision, the SJC found that the language of G.L. c. 62C, § 37 was ambiguous. EMC Corporation, 433 Mass. at 570. After a review of the history of G.L. c. 62C, § 37 in its present form, as well as the prior abatement statutes that it replaced, ⁽¹⁾ the SJC ruled that the Legislature did not intend to abandon the prior standard. Id. at 573. The prior standard used the date the Notice of Assessment was sent as the operative date for the beginning of the statute of limitations period for abatement applications. ⁽²⁾ Thus, the SJC interpreted "date of assessment" in G.L. c. 62C, § 37 as the date of the Notice of Assessment.

III. Effect of EMC Corporation on DOR Abatement Procedures

Effective immediately, the two year statute of limitations period under G.L. c. 62C,§ 37, shall begin to run from that date which is printed upon the Notice of Assessment form as the "Notice Date." The date(s) which will appear in the Notice of Assessment column headed "Assessment Date" will no longer be the date(s) from which the two year statute begins to run, but will nonetheless still be considered the date(s) upon which the tax was actually assessed for all other purposes. Further, this change to the limitations period is retroactive to all open tax periods.

Frederick A. Laskey,
Commissioner of Revenue

May 31, 2001

TIR 01-5

Footnotes:
1 See e.g., G.L. c. 63, § 51, as appearing in St. 1958, c. 503, § 1; as amended by St. 1970, c. 601, § 6; and as amended through St. 1973, c. 708, § 4, prior to repeal by St. 1976, c. 415, § 102.

2 The SJC also considered the practices of the Commissioner and the ATB from 1976 to 1988. The Commissioner stipulated that prior to 1988, the Department may have, on occasion, treated an application for abatement of an assessment as timely if it was filed within two years of the date of the Notice of Assessment. In addition, the SJC found that before 1988 the ATB also relied on the date of the Notice of Assessment and not the date of assessment as the starting date of the two year limitations period. The SJC observed that only since 1988, when assessment dates began to appear in Notices of Assessment, and 1989, when the Commissioner promulgated the Assessments Regulation, 830 CMR 62C.26.1, had the date of assessment been consistently interpreted to be the date that triggers the two year limitations period. See EMC Corporation, 433 Mass. at 571-572.