If you owe back taxes to the Commonwealth of Massachusetts, you may be able to avoid paying penalties by participating in the state’s 2016 Tax Amnesty. From April 1 through May 31, 2016, the Massachusetts Department of Revenue (DOR) will allow individuals and businesses to “catch up” on back taxes (with certain exceptions). If you are among those who have a tax liability from a tax year prior to the current year, you can file a delinquent return or amend a previously filed tax return, pay the tax you owe plus any interest that has accrued, and the DOR will waive any penalties (and interest due on those penalties). The program also includes a limited three-year “lookback” period. Staring on April 1, the DOR website will have an online amnesty return. The DOR will calculate the back taxes and interest you owe, and will also calculate the penalties and interest you may be facing, so you’ll know how much you are saving through the amnesty. Not everybody is eligible for tax amnesty. Amnesty is generally available for an individual or business who has not currently registered with the DOR, who has not filed a tax return, or who has not reported the full amount of tax owed on a previously filed return for any tax return due on or before December 31, 2015. Amnesty is not available to anyone who is or has been the subject of a tax-related criminal investigation or prosecution, who has previously filed a false or fraudulent return or statement, or who filed a fraudulent amnesty return. If you took part in a DOR tax amnesty in 2014 or 2015, then you are not eligible for amnesty on the same tax types or for the same tax periods. The amnesty does not cover current tax liabilities. If you feel you are eligible and plan to take advantage of the Massachusetts tax amnesty, be prepared by gathering all related documents and prior returns, including supporting documentation (W-2 forms, 1099s, K-1, etc.) and Social Security numbers for all individuals named on the return (spouse, dependents, etc.). For a business return, have your tax ID number and records of any sales tax, withholding tax, use tax, etc. Keep in mind that certain tax delinquencies can carry a penalty that is double the tax owed. The Commonwealth’s tax amnesty program can offer certain taxpayers significant savings. For more information on the Massachusetts Tax Amnesty program or other tax issues, please contact Gray, Gray & Gray’s Tax Department at (781) 407-0300.
