CLT
UPDATE
Sunday, June 18, 2006
Illegitimate Capital Gains Taxpayers
--
act now or apparently forever hold your peace
Massachusetts taxpayers have just two weeks to recoup
some $250 million in capital gains taxes they paid under a 2002 tax
increase that was struck down by the courts, but some accountants and
tax advocates say the state has not done enough to alert taxpayers to
the impending deadline.
About 157,000 of the state's 3.3 million tax filers qualify for a
refund, which would average about $1,600. The deadline to file is June
30; the payments will be made, without interest, over a period of four
years.
The state Department of Revenue issued press releases about the tax
refund last year and features the deadline to file for a tax abatement
on its website, said Tim Connolly, spokesman for the Department of
Revenue. However, he said the department decided it would be impractical
to try to individually notify taxpayers of the deadline, because
officials don't know who exactly is eligible....
"I'm sure it would have been an administrative burden, but I do think
the state has a responsibility to communicate to individual taxpayers
that they have overpaid and that they have until June 30 to apply for
the rebate," said Michael Widmer, president of the Massachusetts
Taxpayers Foundation. "I would imagine that large numbers of taxpayers
are not aware that they are entitled to a rebate and will miss the
deadline." ...
Barry Beck, a certified public accountant in Bedford, said that while
the Revenue Department probably had no obligation to personally alert
taxpayers about the refund, it could have been proactive in doing so.
His clients were grateful when he notified them, he said. Beck added: "I
would imagine that many people who do their own returns focus on tax
returns once a year, April 14."
The Boston Globe
Saturday, June 17, 2006
$250m tax rebate deadline looming
About 157,000 people overpaid capital gains
Chip Ford's CLT Commentary
Somehow, the Department of Revenue finds it easier to
chase down those who purchase cartons of cigarettes on the Internet or
through Indian reservations than to find and notify those who overpaid
an illegitimate tax on capital gains unconstitutionally adopted by the
Legislature. Returning tax payments -- or even notifying the
taxpayers -- is "impractical," according to a DOR spokesman.
CLT
worked long and hard to finally get this obscenity reversed.
Now, it's apparently up to you -- and we want to alert you to your new
"responsibility" if you paid that unjust tax.
The deadline for filing for your "rebate" is June
30th. Then the state gets to keep it.
Have you ever heard of a statute of limitations on
taxes owed to the government?
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Chip Ford |
The Boston Globe
Saturday, June 17, 2006
$250m tax rebate deadline looming
About 157,000 people overpaid capital gains
By Stephanie Ebbert, Globe Staff
Massachusetts taxpayers have just two weeks to recoup some $250 million
in capital gains taxes they paid under a 2002 tax increase that was
struck down by the courts, but some accountants and tax advocates say
the state has not done enough to alert taxpayers to the impending
deadline.
About 157,000 of the state's 3.3 million tax filers qualify for a
refund, which would average about $1,600. The deadline to file is June
30; the payments will be made, without interest, over a period of four
years.
The state Department of Revenue issued press releases about the tax
refund last year and features the deadline to file for a tax abatement
on its website, said Tim Connolly, spokesman for the Department of
Revenue. However, he said the department decided it would be impractical
to try to individually notify taxpayers of the deadline, because
officials don't know who exactly is eligible. Each taxpayer may have
differing rates, depending on how long they held the asset.
"It was impractical, mainly because we don't know the universe of people
affected directly," Connolly said. "We don't have any hard list of
people who are eligible for this refund. Even the 157,000 is a
guesstimate based on people who had capital gains in that year. But we
wouldn't know, without getting into the form, who actually qualifies."
Connolly said the Revenue Department has been getting a steady stream of
calls from individual taxpayers about the refund. He added that the
department is also working with state lawmakers who have been fielding
calls.
Accountants, on the lookout for refunds for their clients, said they are
surprised that the state didn't do more, and so is a leading taxpayer
advocate.
"I'm sure it would have been an administrative burden, but I do think
the state has a responsibility to communicate to individual taxpayers
that they have overpaid and that they have until June 30 to apply for
the rebate," said Michael Widmer, president of the Massachusetts
Taxpayers Foundation. "I would imagine that large numbers of taxpayers
are not aware that they are entitled to a rebate and will miss the
deadline."
But some accountants said they haven't fielded many calls from their
clients. Instead, they said, they had to reach out to offer to file
amended tax returns.
"I have over 1,000 clients, and not one of them contacted me. And in
talking to the other CPAs, they say none of their clients contacted
them," said Jim Henderson, a certified public accountant with offices in
Quincy and Norwood.
"I just think people are generally confused about the whole thing," he
said, "and even though they saw it in the paper, they just totally
ignored it."
The refunds could be substantial for many taxpayers, with an average
refund of roughly $1,600. Using specially designed software, Henderson
was able to find 14 of his 1,000 or so clients who were eligible for the
abatement, with individual refunds as high as $7,800 and totaling more
than $28,000.
"What's fair is fair," he said. "With my clients, I want them to pay the
fair tax -- and if they deserve a refund, to get the money back."
The tax rebates should be the final word on what has been an
embarrassing and enduring tax problem for the state.
Taxpayers are eligible for a refund if they paid capital gains taxes at
new, higher rates on their 2002 returns.
Lawmakers enacted new tax rates that took effect May 1, 2002. The
Supreme Judicial Court later overturned the new rate, because it went
into effect in the middle of the year.
Faced with the choice of moving the effective date to January 2002 or
January 2003, the Legislature enraged taxpayers by making the tax
retroactive to January 2002, which meant that thousands of taxpayers
owed additional capital gains taxes.
After prodding from Governor Mitt Romney, the Legislature adopted a
compromise that asked those who paid the higher rate to file what are
called abatements to get their money back.
Barry Beck, a certified public accountant in Bedford, said that while
the Revenue Department probably had no obligation to personally alert
taxpayers about the refund, it could have been proactive in doing so.
His clients were grateful when he notified them, he said. Beck added: "I
would imagine that many people who do their own returns focus on tax
returns once a year, April 14."
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