Current through Register 1531, September 27, 2024
(1)
Statement of Purpose;
Application; Organization.
(a)
The purpose of 830 CMR 62C.30A.1 is to describe the requirements and procedures
for a Massachusetts resident taxpayer to report and adjust the tax due to the
Commonwealth after a change in tax due to any other United States state,
territory or possession or the Dominion of Canada or any Canadian province,
when such tax was or may be the basis for a credit claimed by the Massachusetts
resident taxpayer under M.G.L. c. 62, § 6(a). See M.G.L.
c. 62C, § 30A.
(b)830 CMR
62C.30A.1 applies to taxes imposed under M.G.L. c. 62.
(c)830 CMR 62C.30A.1 is organized as follows:
1. Statement of Purpose; Application;
Organization
2.
Definitions
3. Reporting State
Change
4. Date of Assessment with
Respect to State Change; Determination of Amount of Assessment with Respect to
State Change
5. Taxpayer Offset of
Tax Due
6. Amended Returns with
Respect to State Change
7.
Penalties and Interest
(2)
Definitions. For
the purposes of 830 CMR 62C.30A.1 only, the following terms shall have the
following meanings:
Abatement, a reduction of an amount of
tax that equals the difference between the amount of tax assessed as a result
of an assessment or deemed assessment and the lower amount of tax properly
due.
Another Jurisdiction or
Other Jurisdiction, any state other than
Massachusetts, or any territory or possession of the United States, or the
Dominion of Canada or any of its provinces.
Another Jurisdiction's Tax
Determination, an action taken under the law of another
jurisdiction, that establishes that a taxpayer's tax owed to that jurisdiction
is different from the tax previously paid, when such tax was or may be the
basis for a credit claimed under M.G.L. c. 62, § 6(a). With regard to
partnerships or flow-through entities, "another jurisdiction's tax
determination" includes actions that affect partnership or entity items.
Assessment Records, the official
records of the Department that indicate the amount of tax due and assessed by
the Commissioner.
Commissioner, the Commissioner of
Revenue or the Commissioner's designee duly authorized to perform the duties of
the Commissioner.
Department, the Department of
Revenue.
Duly Filed, filed correctly and
completely in the manner prescribed by the Commissioner.
Credit, the amount allowed pursuant to
M.G.L. c. 62, § 6(a) against taxes imposed under M.G.L. c. 62.
Final Determination, or
State Change, another jurisdiction's tax determination
where there is no right of administrative or judicial appeal. If a taxpayer has
a right of appeal from another jurisdiction's tax determination, the
determination will be deemed final, for a taxpayer with a right of appeal, if
no appeal is taken. Another jurisdiction's tax determination is final on the
date of decision in the court of last resort. Another jurisdiction's tax
determination made judicially is deemed final on the date that the right to any
further appeal expires if the appeal is not carried to the court of last
resort.
Offset.
(a) a reduction, proposed by the taxpayer at
the time of the report of state change, in the amount of payment of
Massachusetts tax owed by a taxpayer after a state change, subject to the
Commissioner's approval; or
(b) a
reduction by the Commissioner in the amount of an abatement requested as a
result of a state change.
Tax or Taxes
, any tax imposed under M.G.L. c. 62, and any interest or penalties imposed
under M.G.L. c. 62C and treated as additional tax.
Taxpayer, any individual, trust,
estate, or any other fiduciary subject to taxation under M.G.L. c.
62.
(3)
Reporting State Change. A taxpayer subject to taxation
under M.G.L. c. 62 must report a final determination resulting in a decrease in
the tax liability to another jurisdiction, based upon which a Massachusetts
credit was claimed, under M.G.L. c. 62, § 6(a), to the Commissioner within
one year of the date of notice of that jurisdiction's final determination,
accompanied by payment of any additional tax due plus interest. Interest is
calculated under the provisions of M.G.L. c. 62C, § 32, from the due date
of filing the original return. Offsets do not affect the determination whether
Massachusetts tax liability has increased due to a state change.
Effective December 5, 2016, a taxpayer subject to taxation
under M.G.L. c. 62 must report a state change to the Commissioner by filing an
amended return in the manner prescribed in
830 CMR 62C.26.2
and must submit a copy of the other jurisdiction's agreement, document, or any
other report that provides the necessary information illustrating the change in
the tax owed to the other jurisdiction.
(4)
Date of Assessment with
Respect to State Change; Determination of Amount of Assessment with Respect to
State Change.
(a) Date of
assessment with respect to state change.
1.
Taxpayer Self-assessment. The tax is deemed to be
assessed with regard to a report of state change under 830 CMR 62C.30A.1(3) at
the time when the report of state change is duly filed.
2.
Commissioner Deficiency
Assessment. For the purposes of 830 CMR 62C.30A.1, the tax is
assessed upon the issuance of a Notice of Assessment to a taxpayer, or the
entry in the Commissioner's assessment records of an amount due from the
taxpayer, if such entry predates the Notice of Assessment.
(b) Determination of assessment amount with
respect to state change.
1.
Taxpayer Self-assessment. Taxes are deemed to be
assessed with the taxpayer's calculation and declaration of the tax due, as
provided under M.G.L. c. 62C, § 26(a), reported as prescribed by the
Commissioner by the taxpayer or the taxpayer's representative and duly filed
with the Commissioner. The deemed assessment is the amount due before any
offsets are claimed by the taxpayer.
2.
Deficiency Assessment by the
Commissioner.
a. If the
Commissioner determines from the taxpayer's report of state change or upon
investigation that, as a result of the change in tax liability to another
jurisdiction and consequent change in the Massachusetts tax credit claimed by
the taxpayer, the full amount of tax has not been assessed or deemed to be
assessed, the Commissioner will assess, notwithstanding the three year
limitation in M.G.L. c. 62C, § 26, the full amount of tax with interest,
as provided in M.G.L. c. 62C, § 32, from the due date of the original
return. Any assessment under 830CMR 62C.30A.1(4)(b) 2. will be made in the
manner provided in
830 CMR
62C.26.1.
b.
Limitation Period for
Assessment. The Commissioner will make any deficiency assessment
within one year of receiving a taxpayer's report of state change, as provided
in 830 CMR 62C.30A.1(3). If no report of state change is filed as provided in
830 CMR 62C.30A.1(3), the Commissioner will make any deficiency assessment
within two years of receiving information from the other jurisdiction that it
has made a final determination of a taxpayer's tax liability that is less than
originally reported.
c.
Limitation on Items Assessed. Any assessment made
under 830 CMR 62C.30A.1(4)(b)2. is limited to changes in a taxpayer's tax
liability directly attributable to changes, adjustments, or corrections to the
taxpayer's tax owed to another jurisdiction resulting in a final
determination.
(5)
Taxpayer Offset of Tax
Due.
(a)
General. When a taxpayer reports a change in tax
liability to another jurisdiction and consequent change in the Massachusetts
tax credit claimed by the taxpayer that results in additional tax due to
Massachusetts, the taxpayer may propose that the additional tax be offset based
on issues for the same tax year that are unrelated to the state change by
attaching an application justifying the offset, with worksheets as necessary,
to the report of state change. The additional tax due as a result of the state
change may not be offset below zero. Any statement or worksheet attached to the
taxpayer's report is considered part of the report of state change.
(b)
Procedure. The
reporting and offsetting procedure is as follows:
1. A taxpayer must report state changes as
provided in 830 CMR 62C.30A.1(3). The taxpayer must report changes in
Massachusetts tax resulting from the change in another jurisdiction's tax
liability and consequent change in the Massachusetts tax credit claimed by the
taxpayer without offsets.
2. To
offset any increased taxes for the taxable year in which the state change
applies, the taxpayer must request an offset amount and attach a statement
justifying the offset to its report of state change. The taxpayer may attach
worksheets illustrating the tax effect and showing the revised amount after
offsets have been taken into account.
3. The Commissioner will make an assessment
of the tax, as provided in 830 CMR 62C.30A.1(4), based upon the report of state
change. The Commissioner will determine the taxpayer's balance due, taking into
consideration the taxpayer's offset request, including the taxpayer's statement
and worksheets justifying the proposed offsets.
(6)
Amended Returns with Respect
to State Change.
(a)
General Rule. Effective December 5, 2016, if, as a
result of the change in tax liability to another jurisdiction and consequent
change in the Massachusetts tax credit that was or may be claimed by the
taxpayer, a taxpayer believes that a lesser tax was due the Commonwealth than
was assessed or paid, the taxpayer shall file an amended return reporting, in
the manner prescribed by the Commissioner in
830 CMR 62C.26.2,
the amount of tax overpaid as a result of the other jurisdiction's change and
the amount of the claimed overpayment, accompanied by a copy of the other
jurisdiction's revenue agent's report, agreement, document, or any other report
illustrating the changes in the other jurisdiction's tax. The taxpayer's
amended return is limited to changes in the taxpayer's Massachusetts tax
liability directly attributable to changes, adjustments, or corrections to the
taxpayer's tax owed to the other jurisdiction resulting in a final
determination from that jurisdiction.
(b)
Limitation Period for Amended
Returns. Amended returns reporting state changes under 830 CMR
62C.30A.1 shall be filed within one year of the date of the notice to the
taxpayer of final determination by the other jurisdiction.
(c)
Limitation on State Change
Amount. Any reduction in tax shown on an amended return as a
result of a state change under M.G.L. c. 62C, § 30A is limited to the
reduction in Massachusetts taxes that results from the other jurisdiction's
change.
(d)
Substantiation. The taxpayer shall, at the time of
filing its amended return, include and attach to it all supporting information,
documents, explanations, arguments and authorities that will reasonably enable
the Commissioner to determine whether the taxpayer is entitled to the reduction
in tax requested. In certain instances an amended return showing a reduction in
tax may be treated by DOR as an application for abatement and will be subject
to the substantiation requirements set forth in
830 CMR
62C.37.1(6).
(e)
Commissioner
Offsets. The Commissioner may offset the amount of any overpayment
resulting from a state change with any additional tax due whether or not the
additional tax is based on issues related tothe change. Offsets based on issues
unrelated to the change may reduce or eliminate the abatement, but any such
offset shall not give rise to a net amount of tax due based on an assessment
that would otherwise be barred as untimely. Any refund resulting from a state
change is also subject to intercept.
(f)
Correlation with Limitation
Period for Amended Returns under M.G.L. c. 62C, §§ 36 and
37. Notwithstanding the rules under M.G.L. c. 62C, § 30A, and
830 CMR 62C.30A.1(6)(a) through (d), supra, a taxpayer may
file an amended return seeking a reduction in tax, including tax paid as a
result of a change in tax paid to another jurisdiction, in accordance with the
limitations provided in M.G.L. c. 62C, §§ 36 and 37.
(7)
Penalties and
Interest.
(a)
Imposition. Any taxpayer that fails to timely submit a
report of state change under 830 CMR 62C.30A.1(3) or pay any additional tax due
plus interest will be assessed a penalty of 10% of the additional tax due in
addition to any other applicable interest and penalties. The penalty becomes a
part of the additional tax due. Penalties and interest may apply to amounts
claimed as offsets that are disallowed by the Commissioner.
(b)
Abatement of
Penalties. The Commissioner may abate for reasonable cause any
penalties imposed under 830 CMR 62C.30A.1(7). A taxpayer seeking an abatement
of any penalties must present specific facts establishing that its failure to
submit a timely report of state change, as required by 830 CMR 62C.30A.1(3),
was due to reasonable cause. A mere assertion, by affidavit or otherwise, that
taxpayer's failure to timely file a report of state change was reasonable or
excusable due to oversight or inadvertence is insufficient to establish
reasonable cause.
(c) Interest
payable by taxpayers on additional amount due resulting from state change.
Interest for a taxpayer duly filing a report of state change will be calculated
based on the balance due after offsets have been taken into account. Interest
on the balance due amount will accrue from the due date of the original return
as provided under M.G.L. c. 62C, § 32(b).
(d)
Interest Payable by
Commissioner. The Commissioner will pay interest on overpayments
resulting from a state change, reduced for any offsets made by the
Commissioner, calculated from the date of receipt of a duly filed report of
state change, at the rate provided for overpayments.
