Massachusetts Gov. Charlie Baker has signed the Massachusetts fiscal year 2016 budget, which authorizes a tax amnesty program to be established for a period of 60 days as determined by the Commissioner of Revenue. The scope of the program, including the tax types and periods covered as well as the look-back period for unfiled returns (for a period not to exceed three years) will be determined by the Commissioner. It is unclear from the legislation how the 3 year lookback will apply. Under the amnesty program, penalties will be waived for qualifying taxpayers who have failed to timely file any proper return for any tax types and for any tax periods, timely pay any tax liability, or pay the proper amount of any required estimated payment toward a tax liability. Penalties will be waived without the need for any showing by the taxpayer of reasonable cause or the absence of willful neglect. The amnesty program will not apply to penalties for underpayment of tax or inconsistent reporting of taxable income, with regard to returns filed pursuant to the amnesty. The waiver of penalties will not apply to any period for which the taxpayer does not file such proper returns.
Participating taxpayers must voluntarily file proper returns and pay the full amount of tax on the returns, or the amount due upon the Commissioner’s assessments, plus all interest due. All required payments must be made by June 30, 2016. The amnesty will not apply to a tax liability of any tax type for a period commencing on or after January 1, 2014. The amnesty will not apply to taxpayers who have been the subject of a tax-related criminal investigation or prosecution or to taxpayers who have delivered or disclosed any false or fraudulent application, document, return, or other statement. The Commissioner is also required to establish administrative procedures and methods to prevent any taxpayer who participates in the amnesty program from utilizing any future tax amnesty programs for the next consecutive 10 years, beginning in calendar year 2015. (Press Release, Office of Gov. Charlie Baker, July 17, 2015)