Massachusetts General Laws - Administrative Provisions Relative to State Taxation - Chapter 62c, Section 30 - Massachusetts Attorney Resources

Massachusetts General Laws - Administrative Provisions Relative to State Taxation - Chapter 62c, Section 30

Federal income tax changes; assessment; abatement; penalty.

Section 30. If the federal taxable income of a person subject to taxation under chapter sixty-two is finally determined by the federal government to be different from the taxable income as originally reported, such final determination shall be reported, accompanied by payment of any additional tax due with interest as provided in section thirty-two, to the commissioner within one year of receipt of notice of such final determination. If the taxable income of a person subject to taxation under chapter sixty-three is finally determined by the federal government to be different from the taxable income as originally reported, such final determination, shall be reported, accompanied by payment of any additional tax due with interest as provided in section thirty-two, to the commissioner within three months of receipt of notice of such final determination. If the federal taxable estate of an estate subject to taxation under chapter sixty-five C is finally determined by the federal government to be different from the taxable estate as originally reported, such final determination shall be reported, accompanied by payment of any additional tax due with interest as provided in section thirty-two, to the commissioner within two months of receipt of notice of such final determination. The report shall include a statement of the reasons for the difference in such form as the commissioner may require. If from such report or upon investigation it shall appear that any tax under chapters sixty-two or sixty-five C or that the tax with respect to income under chapter sixty-three has not been fully assessed, the commissioner shall, notwithstanding the three-year limitation in section twenty-six, assess an additional tax, if any, with respect thereto, with interest as provided in section thirty-two. An assessment under this section shall be made in the manner provided in section twenty-six within one year of the receipt of such report or within two years of the receipt by the commissioner of information from the federal government that it has made a final determination of such person’s federal taxable income or of the federal taxable estate different from that report where no report is filed with the commissioner and shall be limited to changes in such person’s tax liability under chapter sixty-two, sixty-three or in such estate’s tax liability under chapter sixty-five C arising out of or related to the items which resulted in the change in federal taxable income or in the federal taxable estate.

If, as a result of the change by the federal government in a person’s federal taxable income or in a federal taxable estate, such person or estate believes that a lesser tax was due the commonwealth than was paid, such person or estate may apply in writing to the commissioner for an abatement thereof under section thirty-seven within one year of the date of notice of such final determination by the federal government. The commissioner shall not be limited in his consideration of such application to the items which comprise the federal change but shall abate only such portion of the tax assessed or paid as exceeds the proper tax due under chapters sixty-two, sixty-three, or sixty-five C, as the case may be.

Any person or estate failing to comply with the provisions contained in the first paragraph hereof shall be assessed a penalty in the sum of one hundred dollars, or ten per cent of the additional tax found due, whichever sum is smaller said penalty to become part of the additional tax found due. For reasonable cause shown, the commissioner may, in his discretion, abate such penalty in whole or in part.

For purposes of this section, the term “person” shall include any individual, partnership, trust, corporate trust or any other fiduciary subject to taxation under chapters sixty-two or sixty-five C, or any corporation subject to taxation under chapter sixty-three.

For purposes of this section, a final determination of a change by the federal government may be initiated by the filing of an amended federal return by the taxpayer.

[Sixth and seventh paragraphs applicable to any closing agreements executed by any person or taxpayer with the Internal Revenue Service on or after January 1, 2004. See 2003, 143, Sec. 7.]

For purposes of this section, a final determination of a change by the federal government includes a closing agreement or accepted offer in compromise under the Code, as amended and in effect for the taxable year, or any similar agreement that results in a change in federal taxable income, whether or not the audit or other review is complete with respect to issues not addressed in the agreement.

The commissioner of revenue may promulgate rules and regulations necessary to implement this section.

Last modified: March 26, 2006