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December 21, 2024 Clouds | 26°F
The 193rd General Court of the Commonwealth of Massachusetts

Section 37A: Settlement of tax liability

Section 37A. The commissioner may accept a lesser amount than the tax liability owed by a taxpayer in final and full settlement thereof; provided, however, that the following conditions are met:

(a) The commissioner finds that there is serious doubt as to the collectibility of the tax due.

(b) The commissioner finds that the taxpayer has not acted with intent to defraud;

(c) The settlement is approved by the commissioner and at least two deputy commissioners of the department of revenue; and

(d) There is a written agreement, signed by all parties, setting forth the commissioner's reasons for the settlement and all relevant information, including, but not limited to, the names of all parties, the amount and type of tax, interest, penalties and charges settled, and the amount actually paid in accordance with the terms of the settlement. Any amount assessed that is not collected pursuant to the provisions of this section shall be abated by the commissioner.

Upon request the commissioner shall make available for public inspection the written agreement containing a settlement pursuant to this section.

Notwithstanding any provision of law to the contrary, any tax liability settlement under this section which proposes to accept an amount which is twenty thousand or more dollars less than the full amount of the tax liability owed by the taxpayer or which proposes to accept an amount which is less than fifty per cent of the full amount of the tax liability owed by the taxpayer shall be submitted to the attorney general for review. Any such settlement proposal shall take effect twenty-one days after its receipt by the attorney general, unless the attorney general objects in writing to the settlement. In the event the attorney general objects to a settlement proposal, such settlement shall not take effect until the objection is resolved by the commissioner and the attorney general. Any settlement approved under the terms of this section will not be subject to the confidentiality provisions of section twenty-one of this chapter.

Neither the taxpayer nor the commissioner, upon signing the agreement, shall be permitted to reopen the matter which is the subject of such agreement, except by reason of (1) falsification or concealment of assets by the taxpayer, or (2) mutual mistake of a material fact sufficient to cause a contract to be reformed or set aside.

The authority granted hereunder to the commissioner and deputy commissioners may not be delegated to other officials of the department.

The commissioner shall, as part of his annual report under section six of chapter fourteen, list all settlements entered into pursuant to this section during the fiscal year. Such report shall list the name of each taxpayer agreeing to a settlement and the amount of such settlement.