Massachusetts 2023-2024 Regular Session

Massachusetts House Bill H2760 Compare Versions

Only one version of the bill is available at this time.

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1	1	1 of 1
2	2	HOUSE DOCKET, NO. 4005 FILED ON: 1/20/2023
3	3	HOUSE . . . . . . . . . . . . . . . No. 2760
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Michael S. Day and Rob Consalvo
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act providing for settlements of tax liability.
13	13	_______________
14	14	PETITION OF:
15	15	NAME:DISTRICT/ADDRESS :DATE ADDED:Michael S. Day31st Middlesex1/20/2023Rob Consalvo14th Suffolk1/20/2023 1 of 4
16	16	HOUSE DOCKET, NO. 4005 FILED ON: 1/20/2023
17	17	HOUSE . . . . . . . . . . . . . . . No. 2760
18	18	By Representatives Day of Stoneham and Consalvo of Boston, a petition (accompanied by bill,
19	19	House, No. 2760) of Michael S. Day and Rob Consalvo relative to providing for settlements of
20	20	tax liability. Revenue.
21	21	The Commonwealth of Massachusetts
22	22	_______________
23	23	In the One Hundred and Ninety-Third General Court
24	24	(2023-2024)
25	25	_______________
26	26	An Act providing for settlements of tax liability.
27	27	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
28	28	of the same, as follows:
29	29	1 Chapter 62C of the General Laws is hereby amended by striking out section 37A and
30	30	2inserting in place thereof the following section:--
31	31	3 Section 37A. (a)(1) The commissioner may enter into an agreement in writing with any
32	32	4taxpayer, or duly authorized agent or representative of the taxpayer, relating to the liability of the
33	33	5taxpayer in respect of any tax for any tax period ending prior to the date of the agreement.
34	34	6 (2) The agreement shall be final and conclusive and, except upon a showing of fraud or
35	35	7mutual mistake of a material fact, the case shall not be reopened as to the matters agreed upon, or
36	36	8the agreement modified, by any employee or agent of the commonwealth. The agreement shall
37	37	9be in writing to include the names of all parties, the amount and type of tax, interest, penalties
38	38	10and charges settled, and the amount actually paid in accordance with the terms of the settlement.
39	39	11Any amount assessed that is not collected pursuant to the provisions of this section shall be
40	40	12abated by the commissioner. 2 of 4
41	41	13 (3) Prior to making a settlement offer, a taxpayer must be in compliance with filing
42	42	14requirements for all tax years. A taxpayer is “in compliance” when all income tax returns have
43	43	15been filed, whether or not timely, or when, in the absence of a return, an assessment issued by
44	44	16the department under its authority is considered correct and final.
45	45	17 (b) A compromise may be entered into if there is a doubt as to liability, doubt as to
46	46	18collectability, or the possibility to promote effective tax administration. Doubt as to liability
47	47	19exists where there is a genuine dispute as to the existence or amount of the correct tax liability
48	48	20under the law. Doubt as to liability does not exist where the liability has been established by a
49	49	21final court decision or judgment concerning the existence or amount of the liability. Doubt as to
50	50	22collectability exists in any case where the taxpayer's assets and income are less than the full
51	51	23amount of the liability. Effective tax administration is promoted where compelling public policy
52	52	24or equity considerations provide a basis for compromising the liability, or where due to
53	53	25exceptional circumstances, collection of the full liability would undermine public confidence that
54	54	26the tax laws are being administered in a fair and equitable manner.
55	55	27 (c) The commissioner shall prescribe guidelines to determine whether the offer is
56	56	28adequate and should be accepted to resolve a dispute.
57	57	29 (1) In prescribing guidelines, the commissioner may develop and publish its own
58	58	30schedules of allowances designed to provide that taxpayers entering into a compromise have an
59	59	31adequate means to provide for the taxpayer's (and his or her family's) health and welfare and/or
60	60	32production of income, or the commissioner may rely on the existing standards used by the
61	61	33Internal Revenue Service collection financial standards. 3 of 4
62	62	34 (2) The guidelines shall provide that the commissioner determine, on the basis of the
63	63	35facts and circumstances of each taxpayer, whether the use of the schedules published under
64	64	36subparagraph (A) is appropriate and shall not use the schedules to the extent such use would
65	65	37result in the taxpayer not having adequate means to provide for basic living expenses.
66	66	38 (d) (1) The commissioner may require as a condition of compromising the liability a
67	67	39period of up to 3-year future compliance period during which the taxpayer must file all tax
68	68	40returns that are due and must pay all amounts that have been assessed. The taxpayer must pay the
69	69	41 amounts that have been assessed within 90 days of the date of the assessment unless
70	70	42paragraph (2) of this subsection applies. This 3-year compliance period begins when the taxpayer
71	71	43makes final payment of the amount offered.
72	72	44 (2) The taxpayer is not required to pay all amounts due within 90 days of the date they
73	73	45are assessed if the taxpayer files an appeal within 90 days of the assessment date. A taxpayer
74	74	46who files an appeal within 90 days of the assessment date must pay all amounts that are
75	75	47determined to be due within 90 days after the taxpayer’s appeal rights have been exhausted or
76	76	48have expired and the liability has become final.
77	77	49 (e) (1) A “lump-sum offer” is an offer of payments to be made in 5 or fewer installments.
78	78	50 The submission of any lump-sum offer-in-compromise shall be accompanied by the
79	79	51payment of 10 percent of the amount of such offer.
80	80	52 (2) A periodic payment offer is an offer of payments to be made in 36 or fewer
81	81	53installments. The submission of any periodic payment offer-in-compromise shall be
82	82	54accompanied by the payment of the amount of the first proposed installment. Taxpayers who fail 4 of 4
83	83	55to make the promised periodic payments after an offer-in-compromise is accepted shall be
84	84	56notified of the nonpayment and given a reasonable time to bring the account up to date.
85	85	57 (f) The commissioner shall not reject an offer-in-compromise solely on the basis of the
86	86	58amount of the offer.
87	87	59 (g) Any tax liability settlement under this section which proposes to accept an amount
88	88	60which is fifty thousand or more dollars less than the full amount owed by the taxpayer shall be
89	89	61submitted to the Attorney General for review.
90	90	62 (h) The commissioner shall establish procedures:
91	91	63 (1) that require presentation of a counteroffer or a written rejection of the offer by the
92	92	64commissioner if the amount offered by the taxpayer in an offer, be it a lump sum or periodic
93	93	65payments, is not accepted by the commissioner;
94	94	66 (2) for an independent administrative review of any written rejection of a proposed offer
95	95	67or installment agreement made by a taxpayer under this section before the rejection is
96	96	68communicated to the taxpayer;
97	97	69 (3) that allow a taxpayer to appeal any rejection of the offer to the Office of Appeals; and
98	98	70 (4) that provide for notification to the taxpayer when an offer has been accepted, and
99	99	71issuance of certificates of release of any liens related to the liability which is the subject of the
100	100	72compromise.