Section 32: Payment date; interest; notice; contested taxes not collected involuntarily during time taxpayers contest taxes
Section 32. (a) Taxes shall be due and payable at the time when the tax return is required to be filed, determined without regard to any extension of time for filing the return. If any amount of tax is not paid to the commissioner on or before its statutory due date, there shall be added to the tax interest at the rate of the Federal short-term rate determined under section 6621(b) of the Internal Revenue Code, as amended and in effect for the taxable year, plus four percentage points, compounded daily.
(b) Taxes assessed under sections twenty-six, twenty-seven and thirty and taxes and penalties assessed under section twenty-eight shall include interest as provided in paragraph (a) of this section to the date when the tax so assessed, or any unpaid balance thereof, is required to be paid, which shall be the thirtieth day following the date of the notice of tax due.
(c) A penalty assessed under subsection (a) of section thirty-three of this chapter shall include interest as provided in paragraph (a) of this section from the statutory due date including extensions to the date of payment of such penalty. A penalty assessed under subsections (b) or (c) of said section thirty-three shall include interest as provided in paragraph (a) of this section from a date thirty-one days after the date of the notice of assessment to the date of payment of such penalty.
(d) Any notice authorized or required under the provisions of this chapter shall include a clear and accurate calculation of the accrual of penalties and interest assessed. Each such notice is to display the interest rates, periods and the taxes and penalties upon which these amounts are calculated.
(e) (1) Notwithstanding the foregoing, no tax imposed by chapters 62, 63, 64A to 64F, inclusive, 64J to 65C, inclusive, and by section 21 of chapter 138, shall be required to be paid or shall be collected involuntarily during the period of time that the taxpayer is contesting the tax as set forth in subparagraphs (A) to (C), inclusive.
In the case of trustee taxes imposed by chapter 62B and by chapters 64G to 64I, inclusive, no tax shall be required to be paid or collected involuntarily during the period of time the taxpayer is contesting the tax as set forth in subparagraphs (A) to (C), inclusive, if the trustee taxes were not withheld by the employer or collected by the vendor.
In accordance with the foregoing, no tax shall be required to be paid or shall be collected involuntarily during the time that the taxpayer:
(A) has pending a timely application for abatement filed with the commissioner under section 37 contending that such tax is not due, or
(B) has pending a petition filed with the appellate tax board or the probate court under section 39 appealing the refusal of the commissioner to abate any such tax, or
(C) has pending an appeal from a decision on a petition described in subparagraph (B) of paragraph (1) of subsection (e) to the extent that the taxpayer has prevailed in the appellate tax board or the probate court.
(2) With respect to any assessment of tax, if only a portion of such tax is in dispute as provided in subparagraph (A) to (C), inclusive, of paragraph (1), the provisions of this subsection shall apply only to the portion that is in dispute.
(3) The amount of tax in dispute as provided in subparagraphs (A) to (C), inclusive, of paragraph (1) shall be required to be paid only after (i) the thirtieth day following the date of a decision with respect to such tax by the appellate tax board or the probate court, to the extent that the commissioner prevails before the appellate tax board or the probate court, (ii) the date of withdrawal of any petition with respect to such tax filed with the appellate tax board or the probate court, (iii) the date on which any right of appeal from a refusal or deemed refusal by the commissioner to grant an abatement of such tax expires without any such appeal having been filed, or (iv) in the case of a deficiency assessment but not a deemed assessment under paragraph (a) of section 26, the sixtieth day after the date on which the Commissioner gives notice of such assessment under section 31 or 31A if the taxpayer has not applied to the commissioner for an abatement of the tax, whichever shall first occur. For purposes of this paragraph, the date of a decision by the appellate tax board shall be determined without reference to any later issuance of finding of facts and report by the board or to any request for a finding of facts and report.
Any tax payment delayed under this subsection shall, however, continue to bear interest as provided in this section. The penalty provided under subsection (c) of section 33 shall apply only during such periods as the portion of the tax disputed is required to be paid and remains unpaid.
The statute of limitations on collections set forth in section 65 and the aging of tax liens set forth in section 50 shall be suspended during the period that payment or collection of the tax is stayed under this subsection.
(4) If the commissioner makes an assessment under section 28 or section 29 or if he at any time determines in accordance with written guidelines that (i) the collection of the tax will be jeopardized by delay, (ii) the past tax return filing or payment history of the taxpayer raises doubt as to the collection of the tax if delayed, or (iii) any application for abatement or petition is frivolous and has been filed primarily to avoid prompt payment of the tax, then the commissioner shall by written notice sent by certified or registered mail inform any taxpayer wishing to delay payment of a tax under this subsection of the requirement to deposit security, in a form satisfactory to the commissioner, equal to the unpaid amount which remains in dispute, including any interest and penalties that have accrued or may accrue, that such action is necessary to ensure the collection of such liability. Such security may include a surety bond, cash, cash equivalents, a negotiable bond or a letter of credit from a financial institution located and doing business in the commonwealth. Such security shall not be required if the portion of the tax in dispute, excluding interest and penalties that have accrued after assessment, is $5,000 or less in the aggregate for all tax periods involved in the dispute; provided, however, that in the case of an assessment made against the partners of a partnership, the members of a limited liability company or limited liability partnership or the shareholders of a subchapter S corporation in connection with the activities of such partnership, limited liability company, limited liability partnership or subchapter S corporation, the commissioner shall by written notice sent by certified or registered mail require such security if the total of such assessments made against all such partners, members or shareholders in the aggregate for all tax periods exceeds $5,000. If a taxpayer fails to provide security following written notice by the commissioner, the provisions of this subsection shall not apply, and the tax shall be required to be paid within 30 days after written notice for security was given.
(5) Any dispute over the commissioner's determination that (i) the collection of the tax will be jeopardized by delay, (ii) the past tax return filing or payment history of the taxpayer raises doubt as to the collection of the tax if delayed, or (iii) any application for abatement or petition is frivolous and has been filed primarily to avoid prompt payment of the tax, shall be resolved by the appellate tax board. Within 30 days of the date of the commissioner's written notice, the taxpayer shall file a motion with the appellate tax board seeking a ruling on the commissioner's determination in accordance with rules to be prescribed by the appellate tax board. The taxpayer shall not be required to deposit security or to make payment of any amount in issue until the appellate tax board rules on the taxpayer's motion. The appellate tax board shall rule on the taxpayer's motion within ten business days.
(f) In the event of a deficiency assessment issued by the department after an audit of a return filed by a taxpayer for a tax period, where the length of the audit exceeded 18 months as measured from the department's opening conference with the taxpayer or the taxpayer's duly authorized representative to discuss a field audit or, in the case of a desk audit from its initial letter or other written communication to the taxpayer notifying the taxpayer that a desk audit has been initiated, to its issuance of a notice of intent to assess tax, the department shall determine the interest payable with respect to such deficiency after the expiration of such 18 month period and before the department's issuance of such notice of intent to assess, by reducing the rate provided in subsection (a) by 2 percentage points, but not below zero, or, in the case of an audit whose length as so determined exceeds 36 months, by reducing the rate provided in subsection (a) with respect to such period after the expiration of 18 months and before the department's issuance of the notice of intent to assess by 2.5 percentage points, but not below zero, if in either instance it determines that the taxpayer complied with all requests for information or documentation made during the audit period with substantial promptness and completeness, and where the taxpayer is not otherwise responsible for the extended duration of the audit. A taxpayer may appeal a department determination that the taxpayer did not comply with an audit request for information or documentation with substantial promptness and completeness to the appellate tax board along with any assessed tax in dispute.