Massachusetts 2016 Tax Amnesty Program

By Ally Brophy March 4, 2016

Massachusetts has once again offered delinquent taxpayers some relief, through a tax amnesty program that will run from April 1, 2016 through May 31, 2016. Unlike the recent targeted tax amnesty programs the state has administered in recent years, this program is available to most Massachusetts taxpayers, both individuals and businesses, for various types of taxes.

Key details regarding the amnesty program:

• The program will waive penalties related to the late filing of taxes, but interest will still apply.
• A limited lookback period of 3 years is available for taxpayers who have not previously been contacted by the state.
• Taxpayers who have recently been contacted by the state may still be eligible to participate in the program if late taxes are paid before the end of the amnesty program.
• Taxpayers discovered to have unsettled tax liabilities after the amnesty program ends may be subject to substantial penalties which include the following:
  • Doubling of tax owed
  • Six year lookback period, instead of three
  • Potential criminal prosecution
• The state’s voluntary disclosure program will remain open for those taxpayers that have not been previously contacted by the state (see note below).
• Taxpayers may enroll in the program online beginning April 1.
• Taxpayers that have previously participated in one of the 2014 or 2015 tax amnesty programs are excluded from participating in the 2016 program.
• Participants in the 2016 amnesty program are prohibited from participating in any future amnesty programs for the next ten tax years.
• Additional information about the program can be found on the MA Department of Revenue website:
  • Tax Amnesty Info
  • Tax Amnesty FAQs

Voluntary disclosure agreement vs. amnesty:

As it has for some time, MA continues to offer a Voluntary Disclosure Agreement (“VDA”) program, and it is distinct from the amnesty program. Both of these alternatives generally offer protection to taxpayers who proactively and voluntarily step forward. The protection comes in the form of reduced penalties and lookback periods. This amnesty program differs from the existing VDA primarily in that it (1) applies to both current and new taxpayers, while the VDA program applies only to new taxpayers; (2) involves significantly less administrative burden for the participants; (3) is provided only for a limited period of time; and (4) introduces increased punishment for those who could have utilized the amnesty program, but failed to do so, and are later contacted by the state. Those who step forward after the amnesty program likely can still utilize the existing VDA program, but those who are “caught” by the state may suffer more dearly as a result of forgoing the amnesty.

Please contact your BNN advisor or one of the BNN state and local tax specialists (Merrill Barter, Chris DeRosa or Dan Gayer) at 1.800.244.7444 if you have any questions about participating in this program.