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Massachusetts Department of Revenue Launches Pilot Program for Settling Uncertain Tax Issues—Lack of Anonymity in Settlement Process a Concern

Continuing its efforts to improve the process for resolving tax disputes in Massachusetts, the Massachusetts Department of Revenue has released final AP 637 Voluntary Disclosure Program for Settlement of Uncertain Tax Issues (Click Here) outlining a new pilot program for settling “uncertain tax issues” through its voluntary disclosure program.  (Click Here for a redline showing the modest … Continue Reading

Massachusetts Joint Committee Hears Testimony Yesterday on Bill to Ban Use of Contingent Fee Auditors

Yesterday, the Massachusetts Legislature’s Joint Committee on State Administration and Regulatory Oversight heard testimony on Senate Bill 1710, a bill that would prohibit the use of contingent fee auditors by state agencies, including the Massachusetts Department of Revenue (the “Department”). As the name suggests, such auditors get paid a fee which is contingent on the … Continue Reading

Washington Department of Revenue takes same position on taxability of early termination fees being challenged in Massachusetts

In a ruling that will be of interest to taxpayers following Massachusetts appeals on the issue, Washington has issued recent guidance (see Washington DOR – Termination Fees) asserting that early termination fees for cancelling cellular phone contracts are subject to retail sales tax as taxable telecommunications services. This guidance takes the same position that the Massachusetts Department … Continue Reading

Interstate Truckers Beware—Massachusetts Aggressive Use Tax Policy on Vehicles Purchased Out-of-State Upheld by ATB in Regency Transportation Case

Early this month, the Appellate Tax Board issued a decision involving the application of Massachusetts use tax to trucks that could have implications for all transportation companies doing business in the Commonwealth. In Regency Transportation, Inc. v. Commissioner, the Board held that Regency Transportation, an interstate freight transportation company, was subject to Massachusetts use tax … Continue Reading

Massachusetts Audits and Appeals Update—Transfer Pricing and Embedded Royalties

From time to time, we’ll be using this space to discuss recurring Massachusetts state tax issues were seeing at audit and on appeal.  In the first in this series, we’ll focus on transfer pricing adjustments. Over the past few years, the Department’s auditors have aggressively attacked intercompany payments between affiliated entities—especially for tax years prior … Continue Reading

Massachusetts Department of Revenue posts audit manual:

Taxpayers undergoing Massachusetts tax audits have a new public resource available—the Department of Revenue’s audit manual.  The manual lays out the procedures that auditors should follow when conducting an audit, as well as some high level interpretations of Massachusetts tax law to guide the auditors. You can find the published audit manual by clicking here. … Continue Reading
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