Massachusetts ~ Corporate Income Tax: Subsidiary Denied Security Corporation Classification for Failure to Comply With Application Procedures

first_imgCCH Tax Day ReportThe Appellate Tax Board (ATB) has determined that a taxpayer and principal reporting corporation for a Massachusetts combined unitary group was not entitled to an abatement of additional corporate excise taxes, penalties for the substantial understatement of tax liability, and interest because one of its subsidiaries did not qualify as a security corporation and, therefore, could not be excluded from the taxpayer’s combined return. The Massachusetts Commissioner of Revenue (Commissioner) denied the subsidiary’s classification as a security corporation because the taxpayer failed to file an application seeking such a classification for the subsidiary, as required by statute. The denial of securities-corporation classification for the subsidiary had two negative effects for the taxpayer. First, the subsidiary had a higher tax liability, because a corporation engaged exclusively in buying, selling, dealing in, or holding securities in its own behalf and not as a broker receives favorable Massachusetts corporate excise tax treatment. Second, the taxpayer, as the parent corporation, also had a higher tax liability because the Massachusetts taxable income of the combined group included the subsidiary’s income. The parties stipulated that the taxpayer never made an actual application for the subsidiary’s classification as a securities corporation before the end of any of the tax years at issue. However, the taxpayer argued that there were no clear procedures in the applicable statute or regulations about the application process, that the subsidiary’s filing of separate tax returns for the tax years at issue was a reasonable step to notify the Commissioner of the taxpayer’s claim that the subsidiary was a security corporation, and that the Commissioner acquiesced in the classification by accepting the subsidiary’s separate returns. The ATB rejected this argument. First, the applicable statute clearly requires a taxpayer to file an application requesting classification as a securities corporation before the end of the tax year, unless the commissioner has already approved an application for a prior tax year. Second, contrary to the taxpayer’s contention, a regulation reiterating the statutory application process for a securities corporation was in place during the tax years at issue. Finally, the Commissioner’s acceptance of the subsidiary’s separate returns, without selecting them for audit, was not equivalent to the Commissioner’s acquiescence in the subsidiary’s classification as a securities corporation. The Commissioner’s failure to enforce a statutory provision, the ATB said, has no effect on its authority. Therefore, the assessments of additional corporate excise tax based on the determination that the taxpayer’s subsidiary did not qualify as a securities corporation and that it should have been included in taxpayer’s combined reporting group, were proper. Moreover, the taxpayer failed to provide any evidence to prove that it was not negligent or in disregard of statutory requirements from its failure to comply with the security corporation application procedures. Since the understatement of tax was greater than 10% of the amount required to be shown on the taxpayer’s return, it was proper to impose a 20% penalty for substantial underpayment of tax. However, the ATB found that the penalty amount was miscalculated by the Commissioner and the taxpayer was entitled to an abatement of a portion of the penalties.TechTarget, Inc. v. Massachusetts Commissioner of Revenue, Massachusetts Appellate Tax Board, Nos. C314725, C314726, November 18, 2016, ¶401-602last_img read more

Complete specs of Samsung Galaxy J5 and Galaxy J7 leaked

first_imgA Bluetooth certification leak has revealed that Samsung will belaunching two new smartphones in the Galaxy J series. The phones are revealed to beGalaxy J5(SM-J500/DS) Dual-SIM and Galaxy J7 (SM-J7008).The phones have been certified forBluetooth 4.1 and according to the details the Galaxy J5 will feature a 5-inchscreen with a 720×1280 resolution. The phone will be powered by the Snapdragon410 SoC which also features in the Moto E (2nd Gen) LTE. For multitasking thephone will be equipped with 1.5GB RAM. The phone comes with 8GBinbuilt memory, which is expandable using a microSD card. The phonewill carry a 13Megapixel on back and a 5megpixel on front.The J7 will be the bigger version sporting a 5.5-inch screenwith the same resolution but this phone will be powered by an octa-core MarvelPXA1936 chipset. Other than that thephone might feature 2GB of RAM and a 3000mAh battery. The camera issimilar to what we’ll get with Galaxy J5. Both phones will feature Lollipop 5.1out of the box.last_img read more