The Massachusetts Commissioner of Revenue has established a 2-month amnesty period starting April 1, 2010 until June 1, 2010 applicable for tax periods ending on or before December 31, 2009 that is limited to sales-use taxes, withholding taxes, and certain business tax liabilities. ( Massachusetts Technical Information Release 10-5, 03/12/2010 .)

Eligible tax types. The amnesty program is limited to taxpayers with the following existing business tax liabilities: sales-use tax, sales tax on telecommunications services, meals tax, meals tax local option, materialman sales tax, withholding income, performer withholding, pass-through entity withholding, lottery annuity withholding, room occupancy excise, room occupancy excise local option, convention center financing fees on room occupancy in Boston, Cambridge, Chicopee, Springfield, West Springfield, and Worcester, convention center financing surcharge for sight-seeing tours, convention center financing surcharge on vehicle rentals in Boston, convention center financing surcharge on parking in Boston, Springfield, and Worcester, deeds excise, cigarette excise, cigars and smoking tobacco excise, club alcohol beverage excise, gasoline excise, special fuels excise, special fuels excise local option, and boat/recreational vehicles sales tax.

Eligibility. The program is open to taxpayers who have been issued a Tax Amnesty Notice and have an unpaid and previously self-assessed tax liability for an eligible tax type, or have been previously assessed a tax liability for an eligible tax type are properly disputing the unpaid liability, or are delinquent in paying the liability. Those who have entered into a payment agreement before the start of the amnesty period are eligible. Those with pending appeals qualify if they receive a Tax Amnesty Notice and timely pays all taxes and interest owed in full. Payment of the outstanding liability does not constitute a forfeiture of statutory rights of appeal or an admission of liability for the disputed assessment.

Not eligible. Taxpayers that are the subject of a tax-related criminal prosecution or investigation, prior to April 1, 2010, are not eligible. Those that have signed a settlement agreement are not eligible for amnesty for the tax periods covered by the settlement agreement including any settlement reached through the Department’s Litigation Bureau, Office of Appeals or Offer-in-Settlement Unit. Those 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 regarding that assessment are not eligible.

Amnesty. If a taxpayer pays the full amount of tax and interest as shown on the Tax Amnesty Notice, the Commissioner is authorized to waive all unpaid penalties and the interest directly attributable to those penalties for those imposed for failure to timely file a return; failure to file a proper return; failure to timely pay a tax liability; failure to file, report or pay electronically; and failure to pay the proper amount of any estimated tax payment for such period. When an eligible taxpayer pays the full outstanding balance of tax and interest with respect to previously filed returns or assessments, the Commissioner will waive the unpaid penalties as to that taxpayer for those tax periods. Penalties that have been assessed or that could be assessed by the Commissioner against a taxpayer for liabilities relating to any other tax types are not eligible for waiver under the amnesty program.

Amnesty payment and penalty. Required payments must be received by 5:00 p.m. EDT, June 1, 2010. If a payment is delivered by U.S. mail or a recognized commercial delivery service, payment will be considered timely if the date of postmark is on or before June 1, 2010 even if the mail is delivered after such date. If an eligible taxpayer fails to make a full payment of all tax and interest due under the amnesty program for each tax period for which the taxpayer receives a bill, the Commissioner may impose an additional amnesty penalty of up to $500 per taxpayer, to be added to and become part of the outstanding balance due.

Submitted by Jim Ventriglia of James P. Ventriglia, CPA, Inc. or Cranston, RI.  James P Ventriglia, MST, CPA, is DDIFO’s CPA and has been servicing the accounting needs of  Dunkin’ Donuts franchisees for decades. For more information contact him at  jimv@jpvcpa.com or at 401-942-0008.